Is short term growth worth devaluing your brand?

by Bryan Kauffmann, Director of Marketing

I was reading some articles recently that were discussing the pros and cons of “sales” in service based industries.  One company in particular caught my attention – a boutique photo studio.  The owner was discussing that the benefits of having a sale was the increased traffic into the studio, and higher name recognition.  The cons of the sale was that the clientele that was attracted to the service was less loyal, only looking for the best price for the service, and aren’t truly concerned with the quality of the service provided.

How often do we run into the same issue – in order to attract new clients, we feel we have to offer discounts on our pricing to hook them.  By continuing to offer discounts and other promotions, we tend to devalue our services and we end up getting new clients who will leave when they find a similar service at a better price.  This also deters current and past clients from utilizing your services as they know that eventually you will put out a promotion or discount on your services and they will just wait for that to come around.

After reading these articles, I came to this conclusion: The decision to discount may lead to the devaluation of the service you offer, and the devaluation of your brand.

So how do we rectify this devaluation and client perception of our services?  It comes down to these few basic principles:

• Have a clear understanding of who your ideal client is 
• Create a plan to market your services to them without discounting your services 
• Make sure your business model has a plan for client retention.  If you can keep your best clients as loyal clients, you won’t have the same advertising costs in order to attract new clients.  It is always cheaper to keep an existing client than try to get new ones.

Now, having said that, is it wrong to have a promotion? Of course not.  Sales and discounts can be used for rapid new business growth, and retention efforts.  Timing is key though for these promotions.  If you are offering a different promotion every week, or every month, you are training your prospects to wait on buying since they know that if they do, a better deal might come along – and we don’t want that to happen.  Use your promotions to create a sense of urgency and only offer it for a limited time.  Evaluate the impact of the offer you ran against normal business.  Was there a serious lift in business?  Did you create lasting clients? If there wasn’t a noticeable difference, or the clients didn’t last, was the offer worth running?  These are just a few questions to think of as you move forward.

I’d like to sign off with this last thought: Don’t sacrifice your brand or your business through quick revenue generating offers.  The devaluation of your services isn’t worth it in the long run.

TeleContact Resource Services has been in business since 1994, and has served over 3,000 clients. If you are interested in the marketing services that they offer, give them a call at 800-551-0567.

WHEN PROMOTIONS JUST DON’T WORK

by Bryan Kauffmann – Director of Marketing - eContactLive, Inc.
 
How many times have you been in this position – you have come up with and presented an absolutely brilliant idea for a promotion that will be a sure way to bring in new business and boost sales only to have it produce absolutely nothing (or very little)?  As you sit there and sift through the results looking for any miniscule shred of reason as to why the promo didn’t work, wondering how it could have underperformed at this magnitude, clinging to the hope that maybe by extending the offer another day will produce amazing results, just know that you are not alone - we have all had a failed promo at one time or another.

 So what could be the reason for this latest sinking ship of a promo?  We have found that there are a few factors that affect promotions that are out of our control, and a few reasons that we directly control.

OUT OF OUR CONTROL
1.    Consumer Behavior – This is probably the one factor that everyone wishes they have the most control over.  The ability to make people buy, sign up, donate, participate or whatever the goal for your promo is would be a wonderful thing to have control over. 
2.    The Economy – Every so often there is a downturn in the economy, and both companies and consumers go into panic mode.  Companies want to boost revenues so they can keep their doors open, and consumers want to keep their money in fear of what the future holds.  The increase in the number of promos leads to a devaluation of products and services, and reaffirms in the consumers mind that they were overpaying to begin with. 
3.    Force Majeure – Usually this term is used for natural disasters, but we will broaden the scope to also include acts of terror, war, and other catastrophic events that affect your targeted consumer base.  We know that these events are rare, but do happen, and can affect our marketing efforts.  Unfortunately, we have no control over these situations.

IN OUR CONTROL
1.    The Offer – Is what we are putting out to our consumer base really what they want?  Have we looked at results of previous campaigns to see what works, or rather, doesn’t?  While we want to provide the best possible offer to our prospects, we need to make sure we aren’t devaluing our brand with the offer. 
2.    Timing of Promotions – How often are you putting out promos?  One thing we all need to remember is that consumers are easily trained, and they will wait for the next “better” offer to come out unless you manage those expectations and only put out promos when you want to make an impact.  Is your business cyclical?  Are your offers in anticipation of the next cycle, or are they reactionary to slow performance? Do you advertise around the holidays?  Depending on your business, this may not be the best time. 
3.    Expectations – Have you over-promised on the results prior to launch?  When setting the expectations for the promo results, have results from previous offers similar to this new campaign.  If the offer has never been run before, and no other offer you have done has been similar, don’t set high expectations – you may be disappointed.
4.    Anticipation – Promotions can be exciting to think up and launch.  The anticipation of phenomenal results can cloud your view of reality when it comes to analyzing the results.  This closely ties into managing the expectations.  Many times we have put out a promo with dollar signs in our eyes, and have been disappointed in the results – even though we may have come out with a positive ROI. 

Now, those last few points were not an all inclusive list of issues we can run into, but they do cover some very vital issues that we have all run into at one time or another. 

So how do we make every promo a “home run”?  To be quite honest, you will put out promos that – much like a toddler – will fall flat on their face.  Some of the best campaigns I have run haven’t had an offer – just a great headline and some amazing image to tie it all together. 

One thing I like to tell people putting together any offer – if you are having fun putting it together, if it sells you on the product and/or service, and if you don’t feel hesitant about putting it out then go on and push it live!  If there is any doubt though, address the issue and find out why there is push back.  It may be that the concept is theoretically a great one, but just won’t relate or translate to your ideal consumer.  It is better to work out the kinks before you feel like you put out a brilliant offer, but the consumer response tells you otherwise.  Remember that you are not your target consumer.  The marketing doesn’t have to appeal to you – it has to appeal to the general public – and they are a tough crowd!