Are business promotions really beneficial online?
Marketing dates back to ancient civilizations before newspapers, television, radio and of course, the internet was created. At that time merchants and workers were advertising their products and services differently, trying to catch the attention of passers-by with interesting and eye-catching signs. Since then, marketing and advertising have developed in multiple ways but different types of business promotions have always been part of it.
Buy two items for the price of one, buy a new TV and get a discount for a new mobile model, get a 25% off coupon and so on. We have all seen and heard of such promotions, some of them were appealing and were bringing added revenues to the companies and some of them failed completely. Despite this, there has never been a point in time where companies weren’t promoting something.
Now as most businesses have switched online, their marketing and sales models have changed and adapted to the new digital marketing era. With this new model, one thing has stayed the same – promotions are still an inseparable part of business. Today, most customers couldn’t care less about the marketing tactics of most companies, while they are receiving thousands of advertisements and promotions daily they all think that the company has one goal only, to sell them as much product as possible. Given this situation, one might be doubtful if promotions are really beneficial for businesses.
What is the power of online business promotions
While selling products and services is the ultimate goal of all enterprises, there are far more factors at play, than there were even one year ago. Promotions not only help online businesses get the desired number in sales reports, but to promote the brand itself, establish a long-time relationship with customers, provide a sense of exclusivity, and create a loyal community around the brand. According to Forbes, business promotions today are even more powerful than they were ten years ago.
Some industries in online business have more space for promotions and use them in many wonderful ways to turn potential customers into loyal ones. There are certain industries that benefit from promotions the most for various reasons. This article describes four such industries, what kind of promotions are most used by the companies operating in these industries and what are the benefits gained from them.
The online financial industry includes providers of financial services and trading – Forex brokerages, cryptocurrency exchanges, and various online payment systems. As they operate online and do not have an actual physical touchpoint with the customer it is essential to have attractive offerings. Especially when there are a lot of companies in this industry and the competition is always savage.
On the other hand, customers are searching for companies or providers that are offering the benefits they cannot attain with any other entity. Since promotions always include either discounts or offerings of certain things for free, not all companies are able to offer them on a daily basis. Hence, these promotions are also something that differentiates one company from another and gives it more validity and reliability in the eyes of customers.
The most popular promotions in these sectors are bonuses and financial trading benefits for the customers. Bonuses are often offered for opening an account with a certain brokerage. Traders who decide to register to get free money for trading, or can double the deposits they have made. Such promotions help providers to get more customers and encourage them to remain with the company.
The fact that promotions for finance companies are very beneficial can be confirmed by the demands of customers. The majority of them are searching for financial companies that offer such promotions as they provide a great chance to test one’s skills and profitability.
This is a relatively new industry. Online ride-sharing services have changed the transportation industry for forever now. Companies operating in this service provide us with the opportunity to plan our rides the way we want and customize the service as we like it. They are also very generous with the promotions and definitely get benefits for it. Ride-sharing companies have a different model of operating as for them both service providers (drivers) and service users (passengers) are considered to be customers. In many cases, drivers are more important than passengers. Therefore, promotions are offered to them exclusively sometimes.
Promotions that are directed to drivers are different from the ones that are intended for passengers. One of the best examples of a company offering promotions is Uber, the first company in this industry. It offers promotions to drivers that are not their customers yet. Without drivers Uber cannot operate, therefore it has designed a very clever bonus system to encourage drivers to become a part of the Uber network. In order to receive the bonus, a driver should register with Uber with a driver referral code. After the company approves the driver he or she has to meet the requirements of the bonus to receive it in the end. The bonus, in essence, is a monetary reward, to encourage the driver to start working. If you look at the size of Uber and their presence you can see that the bonus system is working very successfully.
Benefits for the passengers are different. Uber offers them free credits when a person downloads the Uber app and creates an account. At the same time, users can get promotional codes for referrals.
eCommerce is an online industry where you can find the most business promotions. The variety of eCommerce stores brings diversity to online promotions. They are best used by the stores that are selling consumable goods such as health products, beauty products, makeup, clothes, etc. These products are frequently used and require restocking every once in a while. Since there are a lot of brands that provide these products, competition has become very challenging. Each business tries to create a good customer experience so that the customer will stay for a long time and buy more and more. Promotions are really helpful for this. There are several types of promotions used by eCommerce stores.
Gift boxes are often offered by online stores that sell makeup products. These stores are targeting women and suggest they try different kinds of products in gift boxes. This is why this strategy is so successful – there are buyers who stick to the same products and buy them once they are no longer on their shelves.
Sending gift boxes to them encourages women to try different products, makeup with different color pallets, make up bags etc, something that they would not buy otherwise. Chances are that they will like the product and become constant buyers, even if they don’t, the sense of loyalty will be strengthened as everyone likes to be rewarded. There are also buyers who try new things every time, stores can design boxes with products that they often overlook, and drive their attention to it.
Gift cards for similar products are also very popular, especially for stores that offer health and skin-care products. These gift cards are sent to loyal customers once in a while for products that are similar to ones that they are already buying.
These promotional strategies are very beneficial for stores and customers, however, one of the best and most common promotions is the rewards system. Customers are getting rewarded with points for every purchase they make. This encourages them to buy more, especially because they can use these points for buying whatever products they want at the same store. This strategy is so beneficial for eCommerce stores, that some have pointed out that 80 percent of their sales come from these types of promotions.
Just like many other industries, tourism has switched to the digital platform. The times when you had to call hotels for a reservation and spend time researching what activities to do is a thing of the past.
Booking.com, Tripadvisor, and Airbnb have become best friends for travelers all around the world. With the help of these platforms, everything related to traveling can be done online – choosing where to stay, booking hotels, searching for activities and experiences and booking them in advance. This has made traveling even more enjoyable and therefore millions of people are using online services to plan their time abroad.
It is also essential for these online businesses to keep customers loyal. Promotions in this industry are not dedicated to sales as much as they are dedicated to the customer experience and loyalty. The types of promotions for online businesses in the tourism industry include referrals, promotional codes, and different perks. For example, travelers who are using the platform often can receive codes for their next destination. Booking.com offers travelers perks such as free airport transfers or welcome drinks when they get to the hotel they have booked. Referring the online booking website to friends might get you an additional discount, therefore many users refer the service to others.
These promotions are very popular among customers, as everyone loves to get a discounted price just because they are using a certain website, or feel special when they receive free drinks to start their vacation right away. Promotions are undoubtedly very beneficial to online businesses operating in the tourism industry as they encourage people to remain loyal.
How to use promotions for your online business
While promotions are mostly offered by the types of online businesses that are on our list, other online companies that are operating in different fields can use them successfully as well. Everyone loves to feel special and exclusive, and get additional benefits. Promotions provide all those emotions and inspire customers to be loyal to certain companies. This is why promotions have always been part of businesses. However, not all promotions end up being seen and used, some of them are not successful and don’t bring any benefits to the company. It is important to know how to make a promotion in the right way. Here’s some advice.
Learn what your customers want
Some companies run unsuccessful promotions simply because they are offering promotions for products nobody wants. Today, as we live in the era of internet and technology, it is easy to understand what a customer wants and prepare promotions based on this valuable information. If you have an online business it means you have a couple of ways to track what your customers are looking at, and what they buy. You can use this information to create a promotion your customers will appreciate. It also gives a great opportunity to offer exclusive promotions to your most loyal customers.
Learn which products your customers love and want to buy and offer them exactly what they want. This way they will always find them attractive and try to get your promotions every once in a while. Showcase how you are rewarding people who use your products or services and others will be excited to be the next customer to receive them.
Offer realistic promotions
Always offer promotions that are valid. Nobody believes that someone can get a product or service that costs 1000 USD for 19 USD. It is simply unrealistic. Seeing this, many of your customers will find you dishonest and will not buy from you again.
This mistake is made more often than you can think. It does not bring any benefits to your company, as it is clear that the previous price is increased and the product does not have that much of a value. This kind of promotion will make you look desperate. Avoid them, and offer promotions that are realistic.
Make it consistent and fair
It does not mean you need to have promotions every day. Some online businesses, especially in the beginning, cannot offer promotions all year round. However, if you offer one it must be consistent. If you have certain criteria for the customers who are eligible to receive a promotion, everyone who falls in this category should receive it. Imagine that your customer refers your business to a friend because when they are registered with you they receive a $50 gift card which they can use after spending another $50. Once the friend registers you need to offer them the same promotion otherwise, none of them will stay with you.
Guest author: Konstantin has been in marketing and advertising since 2011. After leading marketing efforts of one of the largest financial brokerages and an innovative b2b fintech company, he decided to go solo and is now focusing on consulting financial companies on how to drive the best results from their digital marketing efforts. Next to this, Konstantin has been showing interest in the recent regulation of the most competitive industries – finance and iGaming. Stalk him on Quora or connect via LinkedIn to learn more.