Gone are the days of only running promotions during traditional holiday seasons. Now more than ever, discounts and special offers present consumers with the final push needed to complete a well-thought-out purchase. While a promotion can be effective, implementing one doesn’t come without its downsides. So, do promotions make sense for every business, and if so, how many promotions are too many? One word: Test.
Why Should You Run Promotions?
It may not make sense for every business to test into promotions, but if it makes sense for you, there are various benefits to doing so.
- Tracking Capabilities
- One of the most impactful reasons to test promotions is the ability to easily measure your success by monitoring how many times a promotional code is redeemed. It’s recommended to test different codes for different platforms, so you can determine which platform generates the most sales. It’s important to note, however, that people often forget to apply the code at checkout. Therefore, the benefits regarding tracking abilities only apply if the code is remembered.
- A Leg Up in the Auction
- All new ads enter some form of an ad auction where you will compete against others based on certain factors, with the winner being the one that the system determines is most relevant for the intended audience. Ad quality and landing page experiences are considered in addition to signals for user value, such as how people have previously interacted with content. By running promotions, people are more likely to engage with your ad – therefore giving you a leg up in the auction.
- Improved Customer Impressions
- When done correctly, offering coupons and discounts have the potential to leave a more positive impression on new and existing customers alike. If discounts are offered too frequently, it can lead to brand erosion. Just the right amount can be appreciated and can oftentimes be the final deciding factor in a purchase.
- Attract New Customers
- Discounts have the ability to attract new, potentially brand-loyal customers you would have missed out on otherwise. Reaching new customers is all about building awareness and interest, and promotions are a proven way to do just that.
How Much of a Discount Should You Offer?
A key factor to a successful promotion is competitiveness. Savvy, budget-friendly shoppers are frequently quick to browse other sites for better deals, comparing prices in real time for the best value. Having promotions prepared in advance can help maximize opportunities during peak sale moments, and choosing the right discount may be the difference between a new or existing customer purchasing from you instead of your competition. There are various types of discounts you can offer, ranging from flash sales and shipping offers to bundle offers. Pay attention to what competitors are offering, and continue testing to find what resonates with your customers.
How Long Should You Offer Promotions?
Run dates for promotions vary depending on the type of promotion being advertised. Flash Sales, for example, will only run for a short period but build excitement and urgency quickly. Unconditional discounts may be ongoing, serving as an evergreen offer to your customers on different platforms, but you run the risk of your customers expecting lower prices all the time. On the other hand, long-term promotions work well for some businesses, but this will always vary. My recommendation? Test! Are you sensing a theme?
Who Should You Target with Your Promotions?
Both loyal and new customers could be offered promotions for different reasons. New customers view your brand as a risk, as most are hesitant to purchase from a new company they haven’t purchased from before. Promotions can combat this very common issue by reducing the barrier to entry for your target audience to purchase. If a new customer is saving, they don’t feel the potential loss is as severe should a purchase not meet their expectations.
A promotion may not always lead to a sale for existing customers, but it does remind them that you exist. It’s not uncommon for customers to purchase once and never return, especially with brand loyalty becoming more and more difficult to obtain and retain. Additionally, just like new customers, they want to be served the most relevant ads possible. A promotion may be the very reason a customer returns as opposed to going to a competitor.
Tips For Effective Promotions
It’s no secret that consumers have a limited amount of time for scrolling in a day, so first impressions matter. There are various ways to optimize promotion ads. Below are a few creative elements I recommend testing.
- Text Overlay
- Some users prefer no text overlay, while for others, it’s the only element that has the potential to catch their very limited attention. Test some content with text overlay and some without to better gauge what your audience resonates with.
- Sound
- Design for sound off, but delight with sound on. Successful videos designed for sound-off are visually delightful, with a clear focal point and a super-clear message. A large majority of Stories ads are viewed with sound-on, so don’t miss the opportunity to test and go beyond the visual experience within your ad.
- Landing Pages
- Shoppers value consistency, a page where they can browse directly from an ad without having to worry if the purchase they are considering is included in the promotion. A custom landing page for a specific promotion saves customers time and effort, which is often heavily considered in the final purchase decision.
The Downside to Running Promotions
As valuable as promotions can be, they don’t always make sense to run, especially not frequently. There can be downsides, for example, appealing to customers who aren’t your ideal audience or reducing overall returns if the promotion is not successful. Weigh the pros and cons, and test to garner real results.
Before implementing a promotional strategy, consider the following:
- What are your business goals? Outline your objectives, and work to offer a discount that will help you achieve them.
- What are your competitors running? As mentioned previously, being competitive with promotions has the potential to acquire customers that previously had loyalty to another brand.
- What are the downsides to offering promotions that apply to your business? Draft up a list of pros and cons to ensure implementing promotions into your strategy makes sense for your business.
In the end, promotions can be a fundamental revenue generator for some and off-brand for others. There’s no real sweet spot when it comes to how many promotions to run – it all comes down to testing.
