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What are some of the common pitfalls of using sales promotion too frequently or excessively?

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Sales promotion is a marketing strategy that involves offering incentives, discounts, or rewards to customers or intermediaries to stimulate demand, increase sales, or enhance loyalty. However, using sales promotion too frequently or excessively can have some negative consequences for your brand, your profits, and your customer relationships. In this article, we will discuss some of the common pitfalls of overusing sales promotion and how to avoid them.

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Javed Akkhtar ????

Founder & CEO @ RewardPort | TravelPort Holidays | tripXOXO
Ludovic Scouarnec

Responsable commercial régional - Grand Ouest

1 Eroding brand value

One of the main risks of relying too much on sales promotion is that it can erode your brand value and image. Customers may perceive your products or services as low quality, cheap, or desperate if you constantly offer discounts, coupons, or freebies. This can damage your brand equity, which is the intangible value of your brand based on its reputation, recognition, and associations. To prevent this, you should use sales promotion sparingly and strategically, and focus on building your brand value through other means, such as product differentiation, customer service, or social responsibility.

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Javed Akkhtar ????

Founder & CEO @ RewardPort | TravelPort Holidays | tripXOXO
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Frequent sales promotions can erode brand value by creating a 'discount brand' image, leading customers to question quality and wait for sales, thereby harming regular sales and profitability. Overuse of promotions can overshadow a brand’s unique qualities, reducing its distinctiveness and customer loyalty. To mitigate this: 1. Implement promotions strategically, aligning them with the brand’s identity and values. 2. Focus on enhancing brand equity through quality, innovation, and customer experience. 3. Regularly evaluate market response to ensure promotions support a positive brand perception. Balancing promotions with brand integrity is essential for maintaining long-term brand health.

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Ludovic Scouarnec

Responsable commercial régional - Grand Ouest
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L'impact sur la marge bénéficiaire : une remise appliquée ou un produit offert grappille sur les marges de l'entreprise. Une image de marque potentiellement détériorée et des habitudes d'achat changées.

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Salman Khan

Creating digital-first instant reward solutions for brands & their consumers | Solutions that reach out to 10 Million+ customers annually
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When you constantly offer discounts and promotions, customers may start to perceive your products or services as being of lower quality or value. This can damage your brand image and make it harder to command premium prices in the future.

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2 Lowering profit margins

Another potential pitfall of using sales promotion too frequently or excessively is that it can lower your profit margins and reduce your revenue. Sales promotion can be costly to implement and maintain, especially if you have to compete with other brands that offer similar or better incentives. Moreover, sales promotion can cannibalize your regular sales, meaning that you may lose customers who would have bought your products or services at full price, or who may switch to cheaper alternatives when the promotion ends. To avoid this, you should carefully analyze the costs and benefits of each sales promotion, and set clear objectives, budgets, and time frames for them.

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Ludovic Scouarnec

Responsable commercial régional - Grand Ouest
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L'impact sur la marge bénéficiaire : une remise appliquée ou un produit offert grappille sur les marges de l'entreprise. Une image de marque potentiellement détériorée et des habitudes d'achat changées.

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Salman Khan

Creating digital-first instant reward solutions for brands & their consumers | Solutions that reach out to 10 Million+ customers annually
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Frequent sales promotions can eat into your profits, especially if you're not careful about how you structure them. Make sure you're still making a profit on each sale, even after the discount.

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3 Creating customer dependency

A third common pitfall of overusing sales promotion is that it can create customer dependency and reduce their loyalty. Customers may become accustomed to buying your products or services only when they are on sale, or when they receive some form of reward or benefit. This can undermine your customer retention and satisfaction, as well as your ability to charge premium prices. Customers may also become less responsive to your sales promotion over time, as they may suffer from promotion fatigue or boredom. To prevent this, you should segment your customers and target them with relevant and personalized sales promotion, and balance them with other forms of communication and engagement.

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Ludovic Scouarnec

Responsable commercial régional - Grand Ouest
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Des promotions trop courantes ou trop importantes pourraient venir ternir la valeur per?ue du produit et pousser les acheteurs à toujours attendre des promotions ou offres spéciales avant de passer à l'achat.

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Salman Khan

Creating digital-first instant reward solutions for brands & their consumers | Solutions that reach out to 10 Million+ customers annually
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If customers only buy your products when they're on sale, they may become conditioned to wait for the next discount before making a purchase. This can make it difficult to maintain regular sales without relying on promotions.

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4 Diluting product quality

A fourth possible pitfall of using sales promotion too frequently or excessively is that it can dilute your product quality and performance. Sales promotion can put pressure on your production, distribution, or service delivery processes, especially if you have to meet a sudden surge in demand or offer a large quantity of products or services at a lower price. This can compromise your quality standards, your inventory management, or your customer service. Customers may experience dissatisfaction, complaints, or returns if they receive defective, damaged, or delayed products or services. To avoid this, you should ensure that your sales promotion is aligned with your operational capabilities and resources, and that you maintain your quality control and assurance.

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Salman Khan

Creating digital-first instant reward solutions for brands & their consumers | Solutions that reach out to 10 Million+ customers annually
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In order to offer discounts, you may be tempted to cut corners on product quality. This is a recipe for disaster, as it will only damage your brand reputation and drive customers away.

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5 Inviting legal or ethical issues

A fifth potential pitfall of using sales promotion too frequently or excessively is that it can invite legal or ethical issues that can harm your reputation or expose you to lawsuits. Sales promotion can be subject to various laws and regulations that govern consumer protection, fair competition, taxation, or privacy. You may face legal or ethical challenges if you engage in deceptive, misleading, or fraudulent sales promotion practices, such as false advertising, bait and switch, price discrimination, or spamming. You may also violate the rights or interests of your customers, suppliers, competitors, or regulators if you misuse their data, information, or intellectual property. To prevent this, you should comply with the relevant laws and regulations, and adhere to the ethical standards and codes of conduct of your industry and profession.

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Salman Khan

Creating digital-first instant reward solutions for brands & their consumers | Solutions that reach out to 10 Million+ customers annually
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Some sales promotions can be misleading or deceptive, which can lead to legal trouble. Make sure you're complying with all applicable laws and regulations before launching any promotions.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Ludovic Scouarnec

Responsable commercial régional - Grand Ouest
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Simplifiez vos promotions. ... Regroupez les produits. ... Récompensez les clients pour augmenter les commandes. ... Récompensez les meilleurs clients avec des offres spéciales. ... Remarchandisez votre produit et votre page d'accueil. ... Disséminez des avis sur les produits.

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What are some of the common pitfalls of using sales promotion too frequently or excessively?

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1 Eroding brand value

2 Lowering profit margins

3 Creating customer dependency

4 Diluting product quality

5 Inviting legal or ethical issues

6 Here’s what else to consider

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