How Promotions Can Help or Hurt You & What You Can Do About It

hook-them-on-the-right-promoPromotions can hook a prospect and be a powerful sales driver. The right promotion can increase sales and energize your customers. The wrong promotion can drain your resources and even cause you to loose long-time customers. How does this happen and what can you do about it?

 

Before we begin, take this short quiz and answer each question HONESTLY.

Thinking about your current customers, new customers and potential customers who…

  • do you treat better?
  • gets a better deal on your products or services?
  • receives more of your attention?

Most people will say they treat all three of these people the same. The reality is your customer may be getting the short end of the stick. Let’s take our friends at Verizon Wireless as an example of one company that pays close attention to potential and new customers, but practically escorts  current customers out the door. Here’s how it looks from three perspectives.

Potential Customer: “Oh wow. Look how great the Verizon deal is on this Samsung phone. Only $79 with a Verizon contract. Cool. I’m switching!”

Brand New Customer (30 days or less): “Hey Verizon, I don’t like my phone can I exchange it for a different one?” Verizon: “Sure. No problem.”

Current customer who has spent thousands of dollars with Verizon over the years and is now looking to renew their contract and buy new phone: “Wait, why do I have to pay $150 for the same phone that’s $79 if I was a new customer. Yet, if I switch to AT&T or Sprint I can get the same phone on their plan for just $49! Let’s see, should I be a loyal customer or…”

 

You may be saying to yourself, “Well that’s just how mobile phone company’s work.” Or, “They have different plans.” Actually both of these statements is not, or should not, be correct. Mobile phone companies shouldn’t work this way and typically there are very few, if any, differences in the basic plans.

 

Unfortunately it’s not just mobile phone companies who are turning their customers off. Last spring my lawn company came out with an incredible deal through Groupon. The problem was, you could only take advantage of the deal if you were not a current customer and had not been a current customer for over a year. You may be telling me right now through your computer, “Well, they want to bring in new customers. What’s wrong with that?”

 

Remember business 101? If you answered yes, then you likely know that the cost to acquire a new customer is steep compared to the cost to retain a current customer. The lawn company could have just as easily given a special deal to their current customers when they referred a friend. The best deals are ones that can be shared, so this type of promotion should be a deal for both the customer and the new sign-up. Now everyone is happy and the company has a new customer AND a happy current customer who will likely continue to recommend them long after the promotion is over.

 

Promotions aren’t rocket science, but good promotions take strategic thought. You need to think and plan ahead. Don’t just throw a deal out their like your trying to catch any old fish. A good fisherman (or woman) knows where, when and how to fish. They also know what to do not to loose the fish they already have in the boat! So the next time you’re planning for that great promotion, start with the most important person on your list — your customer. As Zappos learned long ago, if you’re good to them they will not only keep coming back, but they will bring friends!

 

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About Karin Khuhro

Karin Khuhro is a Digital Marketing Strategist, Speaker and Copywriter. As the owner of Strategy E-ssentials she works with other savvy marketers, digital specialists and business leaders to bring knowledge, know-how and solutions to small and medium sized businesses. Connect with Karin on Google+ or Linkedin.