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Why Trade Promotions Fail (and how to avoid the three most common pitfalls)

By Sharmila Pamamull, Senior Counsel

31 March 2022

Why trade promotions fail

Conducting promotions is an important strategy to drive consumer engagement and grow product or service sales. However, we regularly see well-intentioned marketers failing to deliver on their desired campaign outcome, whether it’s the number of entries, sales uplift or acquisition of consumer data. Below are some quick tips that will set you (and your trade promotion) up for success.

How to avoid the three biggest pitfalls when running promotions

1. Not enough advertisement

The number one question we’re asked is ‘Can we extend the promotional period? We haven’t received enough entries’.

The answer is almost always no.

Once a promotion has commenced it would be misleading to consumers to extend the end date, and potentially lead to complaints by reducing existing entrants’ chances of winning. Additionally if permits are required, generally the various lottery authorities will not permit an extension once entries are received or the promotion is advertised.

The underlying reasoning we normally identify for lack of entries is insufficient advertisement of the promotion. Therefore, it’s best to remember that conducting a promotion is not enough unless you are adequately supporting it with an advertising campaign.

A couple of considerations when creating your promotion’s marketing campaign are:

  1. Have you reached out to your customer database with an eDM regarding the campaign? Have you considered sending multiple emails?

  2. Are you identifying when entry levels are low early on and boosting the advertising initiatives?

  3. Is the advertising engaging enough to entice consumers to enter?

  4. Does the advertising make it clear and simple to consumers how to enter?

  5. Can you invest more in social media advertisements to promote the campaign e.g. Facebook ads? Are you targeting the right audience with the social media ads?

2. Targeting the wrong audience

Many marketers jump the gun and develop a sales campaign with all the bells and whistles without first considering who they are wanting to target.

In some instances, you may not actually want to target the whole consumer market. For example, you may only want to target consumers of a certain age group, or entice consumers to purchase who do not already purchase your product/service.

In these instances you have to consider whether the promotion and advertising for the promotion will appeal to the target demographic. For example, a sales campaign which references teenage slang is unlikely to attract an adult audience.

On the other hand, we’ve also seen campaigns where a promoter has targeted their existing demographic only and then wonders why new sales have not increased!

3. Too complex/unclear a mechanic

When running a promotion it is important to consider whether the promotion mechanic used is easy for entrants to comprehend.

In our experience, the best trade promotion mechanics are simple and involve few steps e.g. make a purchase and enter online.

One of the biggest mistakes promoters can make is to try and reinvent the wheel by creating complex mechanics e.g. purchase X get Y reward points, earn a certain number of reward points to get a prize.

Unfortunately the only result in these cases is that consumers become confused, think ‘this is too hard’ and avoid entering the promotion altogether!

A great way to determine if the mechanic is simple or not is to present the competition advertising to consumers or other staff within your business and after 5 minutes ask them:

  1. if they can recall what they need to do to enter,

  2. the prizes available to be won, and

  3. how they can win.

If they can’t recall then it’s best to reconfigure the promotion, changing what they can’t easily recall to create more engagement.

ROI is KEY

Our final advice is to make sure you are recording return-on-investment (ROI) for each promotion conducted (i.e. comparison of cost to conduct the promotion vs sales driven by promotion).

This is a great indicator of determining what is working for your business. Invest more in promotions with higher ROI. Repeat promotions are loved by consumers due to familiarity e.g. McDonald’s Monopoly campaign, and if you find something that works stick to it!

For more information on trade promotion strategies, or help from a terms and conditions template, get in contact with Plexus Promotion Wizard today.

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