Sales promotions can have many objectives
Written by Shirley Lichti for The Record, April 19, 2006

Spending on sales promotions has grown dramatically over the last decade as small businesses have searched for cost-effective ways to attract new customers.

Here are some examples to give you ideas when planning your next promotion.

New Target Market
During the March school break, the Princess Twin Cinemas in uptown Waterloo, offered $2.50 matinees and $2.50 popcorn. Movies such as The Chronicles of Narnia and Chicken Little were promoted via flyers in the daily newspaper.

At only $2.50 per movie, the break-even point was fairly high, says Princess owner John Tutt, but he felt it was worth it to introduce a whole new target market, families with young children, to the theatre.

The result? Not only was every matinee sold out, but almost everyone bought popcorn as well. Reflecting back on what he calls "a hugely successful promotion", Tutt's sole regret was only booking two screening times per cinema instead of three.

Attract repeat business
Global Pet Foods in Kitchener has been in business just one year. Owner Doug Kennedy says he is still trying to get his name out there and attract repeat customers to the store.

Although he has not had a lot of luck with sales promotions in general, he's currently running an ad with coupons for $10 off any purchase of $50 or more and 20 per cent off all accessories valid until April 30.

An expiry date is key to an effective sales promotion because it increases the sense of urgency to take action. Kennedy says a previous door hanger sales promotion offering $10 off a bag of dog food backfired because he did not include an expiry date. One industrious dog owner collected multiple door hanger coupons from neighbours and used them for months.

Some critics claim that coupons attract butterfly customers who are price sensitive and fly from store to store looking for deals.

Gary Miller, owner of two Petals & Pots flower shops in Kitchener and Waterloo, regularly runs coupons and he disagrees. "The beauty for me is that once I get customers in the store, they tend to come back," he says.

"People like to get good value for their money," says Miller. The coupon stimulates an impulse buy and gets people who may not be thinking about buying flowers to come into the store that week.

Move inventory
Old Goat Books, a used bookstore in Waterloo, celebrated its fifth anniversary recently by offering 10 per cent off all books in March.

Co-owner Scott Wicken says he doesn't have a lot of money for advertising. Still, he felt a fifth anniversary event would mark a milestone and was an opportunity to bring new customers into the store.

And since Old Goat Books' anniversary falls at a time of year when sales are traditionally slow, a promotion had the potential to boost sales. February and March are also "big buying months for us - that's when people start spring cleaning," says Wicken. "We have the most inventory on hand right around our anniversary."

The promotion didn't make a lot of money because the margins on used books are slim. But Wicken deemed it a success because it attracted new shoppers, brought back existing customers and helped clear inventory.

Even out demand
In March, Dettmer Tire & Auto Centre in Kitchener offered a $40 rebate to customers who bought any four Michelin Tires by April 7. According to CO-owner and president, Dave Wingert, the promotion did bring in some new customers, although the majority were existing clients.

The main objective behind this promotion, however, was to encourage people to get new tires before the shop's busy season started. "People wait for nice weather before they take their snow tires off," says Wingert. While about 60 per cent of sales occurred in the last week and a half of the promotion, his goal of enticing customers to come in early, was achieved.

Timing is everything
Swanson's Home Hardware Building Centre in Kitchener ran a promotion in mid-March offering 15 per cent off on Vinylguard doors and windows. The promotion did not get a very good response."People shop for windows and doors in the fall and make their decision what to buy in January or February," says President Brad Swanson, "so I was a little late with timing."

Being too early is just as bad. At Petals and Pots, a coupon designed to drop the week after Valentines' Day, ended up being sent out the week before, causing a lot of problems during a very busy time.

Be Unique
Swanson feels the key to a really successful promotion is to do something unique.

Years ago, the store did a bag sale. Shopping bags were sent out with the newspaper and customers got 15 per cent off anything customers could stuff in them. "People got really creative about finding ways to put things in the bag," Swanson says, "including rolls of carpet."

The promotion didn't make a lot of money, he says. But the business exposure was good, the offer brought new people into the store and it resulted in overall higher sales per customer.

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