Using Direct Sales Promotion for Market Share

How can I increase market share?

Direct sales promotion can help build market share, breaking through brand loyalty by offering incentives to buy. This is a strategy best used by small brands breaking into markets dominated by larger brands. Prominent brands can use this strategy to gain additional sales volume, but sales promotion alone, generally speaking, is not sufficient enough reason for a long-time customer to make the switch permanently.

Decisions necessary for effective sales promotion include: establishing goals, selecting appropriate tools, pre-testing the deal and evaluating the results.

Establishing Goals

Depending on the type of target market, specific goals may vary. Targeting consumers, goals could include encouraging purchasing of larger quantities of product, building a base with nonusers and attracting users of competitors?brands. Targeting retailers, goals include inducing them to carry additional items and higher levels of inventory, encouraging off-season buying, building brand loyalty and opening orders with new retail outlets. For your sales force, goals include additional support of a new product, encouraging more prospecting, and stimulating off-season sales. Clear definition of goals will help measure success.

Selecting Appropriate Tools

Consumer Promotion Tools:

1	Samples - can be delivered door to door, sent in the mail, attached to another product or featured in advertising. This is the most effective and most expensive way to introduce a new product.
2	Coupons - can be mailed, attached to other products or inserted in ads. Redemption rates vary - pack distribution is redeemed at about 17%, direct-mail distribution about 8% and newspaper coupons about 2%.
3	Cash Refunds/Rebates - are redeemable after purchase and can be the determining factor among products of similar price and quality.
4	Prizes/Contests/Sweepstakes - offer the opportunity to enter to win cash, a trip or some other large item. Generally, these attract far more attention than a coupon or small rebate.
5	Product Warranties - become more attractive as consumers become more quality sensitive. It is important for companies to consider carefully the length of warranty, what parts are covered, etc. so that the value of sales generated exceeds the potential costs of the warranty.
6	Point of Purchase Displays/Demonstrations - take place at the retail outlet or point of sale. Manufacturers get the attention of the most retailers by offering creative displays and demos that are set up and maintained by the manufacturer and supported with additional advertising.

Business Promotion Tools:

1	Trade Shows/Conventions - can significantly increase sales volume through direct contact with customers. About 90% of a trade show's visitors see a company sales person for the first time. Trade show preparation includes choosing the appropriate show(s) to attend, building a dramatic display to attract attention, a strategy for drawing attendees into your booth and effectively following up on sales leads.
2	Sales Contests - are used to increase sales over a determined period of time by awarding prizes for those sales staff/representatives who attain stated goals. Important issues to consider are what incentives work best for each sales person and what specific goals will be obtained.
3	Specialty Advertising - consists of useful, low-cost items bearing the company logo that sales people can distribute to customers. When choosing a specialty advertising item, consider overall cost, usefulness to customer and whenever possible, the type of item relates specifically to your business. For example, an office supply retailer could have pens, paper clip holders or scratch pads imprinted with their logo.

Pre-Testing the Deal

Sales promotions aimed at consumers can be pre-tested surveying a group of consumers to rate different possible deals. Attending trade shows in which you are considering exhibiting will give you information regarding other exhibitors, attendance, etc., so you can make an informed decision about becoming an exhibitor. Seeking input from your sales force regarding the types of incentive that will inspire them will help you develop a successful incentive program.

Evaluating the Results

Examining sales results before, during and after-a-sales promotion on a particular product or service is perhaps the most common evaluation method utilized. If increases remain after the promotion, it can be assumed that some customer gain has been achieved. Sales promotions work best when your competitor’s customers try your product, determine it to be the better choice, and continue to buy.

Consumer surveys can also be helpful in determining whether they recall the promotion, did it entice them to buy the product and how it affected their future purchasing choices.

Evaluate trade show results by identifying how many new customers were reached, how many were sold either at the show or during subsequent follow up calls, and how many existing customer relationships were further enhanced by your presence at the show.

Evaluation of sales promotion efforts will help in determining how much of your marketing budget is allocated to these efforts.