Articles

Promote or Perish

Retail is a game of incremental growth. And without growth, retail businesses shrivel up and die. Promotion - though misunderstood by many - is the most powerful tool for incremental growth that retailers have at their disposal. There are some simple golden rules for promotion which - when applied diligently - dramatically increase the return on investment.

The first thing to remember is that promotion splits into two areas - defensive and offensive. In the defensive thinking arena is retention of existing customers and maintenance of existing spend patterns. That is, what did we get last year, what did we do to get it and what do we need to do to get it again this year. The offensive thinking arena is about getting more than last year - building off a strong base which is being defended. Growth can come from getting existing customers to spend more and/or attracting new customers.

New customers are the lifeblood of a retail brand. They are expensive to acquire and their acquisition needs to be viewed in terms of a long-term relationship value. However, regardless of whether the customers are existing customers or new customers, the context in which people shop is the same.

The basic assumption every retailer has to live by must be that all retail customers are already served by somebody in their category. To get extra sales or extra customers means a change in embedded behaviour. This creates challenges for promotion.

The golden rules for retail promotion are:
- Cut-through (to be seen and noted)
- Relevance (to be of interest to the recipient)
- Memorability (to capture mind-share)
- Branding (to be attributed & recognisable)
- Call to action (to compel action)

However, for retailers wishing to grow their businesses today increasingly the emphasis is moving towards powerful and compelling call to action (reason to change existing purchasing behavior) and aspirational branding which is consistently delivered in every touch-point with the customer.

Promotion is much more than advertising - it is any communication capable of enhancing the profitability of the relationship with your customers and potential customers, through whatever medium is relevant. We call them "touch-points" and they include your store and staff. And much of the latest thinking is around the journey from "couch to cash register".

It doesn't need to cost the earth to get a promotional result provided you think laterally and cover the golden rules. Is your promotion covering your defensive and offensive objectives? Does it cut-through, is it relevant, is it memorable, is it branded, is there a call to action?

If you don't follow the golden rules stop your promotional spend now. You're wasting money. Seek help from a marketing professional today and build an arsenal of communications weaponry and a battle plan that will help you attain your growth objectives efficiently.