If you do business, promotion is needed to be able to accelerate and increase sales. Promotion may sound like a waste of money, but with the right promotion, you will get high sales. Let's say you sell goods for Rs. 100,000, even though the production costs are only Rs. 40,000. From each sale, you get a profit of PKR 60,000. To sell faster, you want to give free promo postage of up to Rs. 20,000, so your profit drops to Rs. 40,000.
If you do business, promotion is needed to be able to accelerate and increase sales. Promotion may sound like a waste of money, but with the right promotion, you will get high sales.
Let's say you sell goods for Rs. 100,000, even though the production costs are only Rs. 40,000. From each sale, you get a profit of PKR 60,000. To sell faster, you want to give free promo postage of up to Rs. 20,000, so your profit drops to Rs. 40,000.
Of course, if we only sell 1 product, we will lose, but remember we are trying to be sure we will also pursue the volume of goods right? Now let's compare between no promos and promos.
No Promo
|
Promo
|
|
Selling price per item
|
Rs 100,000
|
Rs 100,000
|
Basic price per item
|
PKR 40,000
|
PKR 40,000
|
Gross margin per item
|
PKR 60,000
|
PKR 60,000
|
Promo costs per item
|
Rs -
|
Rs 20,000
|
Net margin per item
|
PKR 60,000
|
PKR 40,000
|
Number of items sold
|
100
|
200
|
Total profit
|
Rs 6,000,000
|
PKR 8,000,000
|
Increase profits
|
33%
|
If you look at the table above, the profit gained goes up 33% because the goods sold also go up to 100%. This is only an illustration, but this is a picture of the potential benefits you get with the right types of promotions. Here are 7 types of promotions that you can use.
The first types of promotions: Advertising
If you use a smartphone every day and use it to search for content either on a website or social media you may not meet with advertisements.
Advertising is very effective to make other people know our products widely.
With a digital society, digital advertising has become the choice for small business owners. Digital platforms such as Google and Facebook offer advertising services starting from Rs. 10,000.
Both platforms also provide services on your smartphone so you don't need a laptop to get started.
Although digital advertising is now an option favored by business people, traditional advertising like TV advertising is still widely used by many companies.
But if you don't have a big budget, you can start from the two previous platforms.
Tip: You can start by using Instagram ads by way of posting one of your posts. The process is very easy and you can start with only Rs. 20,000 per day.
Endorse Influencer
When you are browsing on social media, have you ever met a celebrity / YouTuber who recommends a product to his audience? they are doing endorse.
Endorse is similar to advertising, which increases awareness of your product. The difference is, in endorse, our products are attached to the influencer and their audience feels more "close" when compared to digital ads like Instagram ads.
To be able to use endorse services, you can only send products that you want to endorse, but most influencers set prices for endorsed services.
The greater the number of audiences, the greater the peg payments.
Tip: Don't just choose influencers, big followers don't always mean big sales. You must choose influencers with high engagement (can be seen comments/followers) and in accordance with your target market.
Partnership, let's collaborate
If in the endorse influencer the goal is to capture the audience of the influencer, the goal of the partnership is to get the benefits of collaboration with other parties.
Forms of cooperation that can be done for example collaboration with other products/brands to create new products.
When you collaborate, you get an audience from your colleagues and vice versa.
The more partners you invite collaboration to eat your brand awareness will be more widespread.
Tips: Choose a partner who is complementary alias complementary and still in the same type of audience.
For example, you are hiking shoe business, then you can collaborate with products that sell tents or mountain bags
Bonus, who doesn't like free?
Unlike the discount, on the type of bonus, you will provide additional products or services for free.
The goal is that potential customers will consider the price you set worthy because you provide the main product + accessories for free.
Examples that you may often find maybe that when you buy a smartphone you will get some additional bonuses such as scratch-resistant, casing, or additional cables.
But sometimes we also find bonuses that don't connect like buying 3 free detergents, but still, some are interested because of the product.
Tip: Give bonuses that are relevant to the main product, this can encourage consumers to buy the next product.
Why ? because if your products are good then he will tend to look for similar products in your store/stall.
Discounts, shopping is more efficient
Free postage is one form of discount, where we as sellers provide discounts or other incentives in the form of reduced costs that need to be paid by consumers.
This discount is simply because what we play is our own margin, and the benefits are easily understood by our potential customers.
We have seen many startups give huge discounts up to 90% for the first use, this then significantly increases the number of startup product users.
This shows that a discount is a form of promotion that is simple and easy to understand, however, because playing with margins, the impact is also directly on our finances.
Tip: Give greater discounts to people who have never used our products, if we believe in ourselves that our products are good then that person will be able to make further purchases.
References, recommendations and the like
This reference is a way for a consumer who has purchased your product to provide recommendations or references about your product to their contacts.
A person who references will get the benefits of either point, cashback or the like.
Why can the reference be effective? because the one who referred is the person who is known.
Of course, you have bought something because it was recommended by your friend right? whether it's food or film.
But you can also provide a reference promo as simple as giving a reference code to each potential customer who makes the first purchase through WhatsApp.
Tip: After you provide a referral code, at a later stage you need to ask whether the next buyer has a referral code or not.
If so, then he can get a discount and the code owner can get cashback.
The last type: Loyalty Program
No one wants a businessman other than loyal consumers. why so? because loyal customers tend to re-purchase and the cost of each repurchase is smaller than having to find a new buyer.
To be able to encourage loyalty from consumers, you can provide a loyalty program. If you have ever used a service such as e-commerce, you will definitely get points from every purchase, it is a form of the loyalty program.
Then how can a loyalty program be created for businesses without such a platform? You can create a database manually where you record purchases from your customers and will give bonuses/discounts if they have shopped so many times.
Tip: Communicate the loyalty program to prospective customers before they make their first purchase. Why ? because this loyalty program can also be an incentive for potential customers to turn into consumers.
These 7 types of promotions are just a big picture of the many things you can do to increase your sales. What do you think? What types of promotions are most effective? Please give a comment below.
Thank you 😊
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