The Power Of Promotions

romotions industry in the United States is big business.industry. The pattern repeated itself recently with digital
Every year, brands and retailers spend over $100 billionmusic, and savvy marketers are now tapping the
on promotional incentives designed to capture thepromotional industry to introduce emerging mobile
mindshare of consumers and motivate them to act.content technologies that will further change the way
Through promotions, brands are able to negotiateconsumers interact with their mobile phones.
better shelf space in big-box retailers and set theirDrive Customer Acquisition
product apart from the competition. Promotions helpWhen it comes to acquiring customers for
them drive brand awareness and capture customersubscription-based products and services, few –
information for ongoing CRM. The bottom line:if any – programs can match the cost
promotions help brands drive sales.effectiveness and power of promotions. Magazine
Untapped Potentialpublishers have long realized the benefit of using
But while brand sponsors have long recognized thepromotions as a customer acquisition vehicle and rely
power of promotions, many of the benefits that canon free-trial magazine promotions as a lure to attract
be derived from the promotions industry have gonehundreds of thousands of new subscribers each year.
largely untapped.Digital music, phone time, and mobile content are just a
What most product suppliers fail to realize is that thesampling of the subscription-based products in the
promotional medium can serve as a catalyst to quicklymarket that are ideal for promotion-based acquisition
educate consumers about a new product, vastlyprograms. Through free-trial promotions, companies
increasing the product’s chances of succeedingare able to simultaneously introduce their product to
in the retail market. They don’t consider thatmillions of consumers for a fraction of the cost of
promotions can serve as a powerful customertraditional advertising efforts and then integrate further
acquisition tool and are more effective anddiscount offers or incentives to entice them to sign on
inexpensive than virtually any other solution around.as an ongoing customer.
Perhaps worst of all, they don’t make theGenerate New Revenue
connection between their product and the enormousCompanies are constantly developing products for the
revenue stream they could generate by marketingretail market. But few product providers consider the
their products to the promotional industry.enormous revenue stream that can be generated by
Educating Consumersselling their products promotionally. Digital media, in
Whenever a new type of product is introduced intoparticular, makes an ideal promotional product because
the marketplace, there is a significant lag time beforeof its universal appeal and low cost of delivery. By
consumer awareness catches up. For the product toselling a product promotionally, companies can often
succeed, consumers need to change their behavior.drive greater per-product margins than they can from
But first they have to understand what the product is,a retail product because there are fewer sales layers
how to use it, and how it benefits them. This is whereinvolved in the process. What’s more, selling
promotions come into play.products promotionally offers companies instant entry
The promotional medium gives product suppliers theinto a promotion sponsor’s long established
opportunity to get their new product into the hands ofdistribution channel and enables companies to sell
millions of consumers, enabling them to sample theproducts in mass quantities that would be unimaginable
product and become familiar and comfortable with it.on the retail side.
Once this is accomplished, retail sales follow.Imagine your product  or ten million pieces or
For an example of this, we need only to look at theyour product  in hundreds or even thousands
evolution of prepaid phone cards. When prepaid longof big-box retailers across the country. That’s
distance cards were first introduced into thethe power of promotions.
marketplace in the early 1990s, telecom providersThe Promotional Edge
couldn’t give them away. RetailersWhether it’s a brand sponsor looking to capture
wouldn’t buy them, so providers were forcedthe mindshare of potential customers or a product
to put them into stores on consignment, only to returnsupplier interested in fully leveraging its revenue
two weeks later and discover that not a single productopportunities, promotions hold the key. Promotions
had sold. The problem was lack of broad-basedserve as a direct link between the product provider
consumer education and awareness. Consumersand its consumers and can be reshaped and
couldn’t understand how a plastic cardreconfigured as needed to achieve the desired results.
featuring a PIN code equated to $10 worth of longIn today’s fiercely competitive marketplace,
distance phone time. It wasn’t until prepaidquickly educating consumers, building market share and
phone cards started turning up as giveaways in millionsdriving profitable revenue are critical to success. And
of packages – everything from Gillette razors tosavvy product providers and marketers who
cereal boxes – that consumers caught on. Asunderstand and take advantage of the promotional
soon as they did, retail sales flourished and in a fewmedium can get the competitive edge they need to
years time, prepaid phone cards were a $4 billionsucceed and thrive.