Sales promotions — such as rebate promotions, discount offers and gift card promotions — are effective only as far as they guarantee relevance to your target customers. Not all promotions, unfortunately, achieve the projected results in terms of acquiring new customers and fostering customer loyalty. The following essential tips can help in designing a winning promotional strategy so that you keep your customers from abandoning your brand in favor of another. These tips are also helpful in motivating customers to try your products and services, even in the face of aggressive competition or diminishing customer demand.
Design Different Promotions for Acquisition and Retention
In nearly every industry, more value (profit) is created by retaining customers over the long-term — yet more money is spent on acquiring new customers in the short-term through extensive advertising and promotions. In many cases, existing customers are completely forgotten. In the fitness industry, the key is converting new customers to long-term customers and the way to do that is through activity-based incentives. The banking industry has long known that customers that use direct deposit, ATMs and electronic bill pay are 10 times more likely to stay on board than those who don’t use these services. The time has come for clubs to pay for performance! Use promotions to encourage your customers to use your facility — you both will be glad you did!
The Importance of Customer Segmentation
Since your product and service caters to a wide range of buyers, customer segmentation is an important step prior to devising any promotional strategy. Some customers, for instance, may be more price conscious than others. While some buyers prefer a short-term commitment, others prefer a longer-term commitment. Customer behavior data such as these can prove helpful if you plan to use incentives such as gift cards. Since promotions come in different flavors, segmenting your customers will keep you in the loop as to which offers are more relevant to which groups of buyers compared to others.
Use Promotions That Offer Real Value
Some companies limit their promotions to discounts, thinking that all buyers appreciate lower prices. While many customers do appreciate getting discounts, there is one clear disadvantage to this type of promotion — the value of a discount disappears once the purchase is made. In contrast, a promotional gift offers long-term value. A gift card can surprise your most loyal customers especially if they get something that they might not have purchased themselves anyway. Because a promotional gift offers value beyond the completion of a purchase, it will be considered valuable and more relevant by your customers. Most importantly, it will not cheapen your product in the same way that a discount would.
Connect With Customers to Foster Brand Loyalty
These days, promotional incentives should not simply bring instant gratification benefits. It is crucial for any promotional tool to help build and cement customer relationships. A special offer will not only bring long-term value compared to a discount, it may also be used to convert leads and to save a sale that would have otherwise been lost. Customers are emotional creatures, and once you surprise them with something valuable they are bound to remember your brand or your product for a very long time. Consistent efforts such as these are useful in fostering brand loyalty, especially in the fitness industry, wherein you need to differentiate your product or service from sometimes identical offerings.
An exceptional promotional strategy is more than just discounts and rebates. It’s important for your promotions to be relevant and to offer real value to your customers. Wholesale gift cards, when designed and customized the right way, can prove to be a highly-effective and budget-friendly promotional tool.
Tim Rohner is the VP of Sales and Marketing for Mpell Promotion, “Compelling Promotions for the Fitness Industry.”
