Seven Simple Steps to Ensure Financial Rewards from Promotions
When launching a promotion do you hope for the best or plan for success?
Perhaps you already build a financial pro forma for your promotions, if so, great! However, if you do not, you should. Here are very simplified steps of what to do:
Step 1: Develop your promotional idea
Step 2: Determine your cost of the promotion (include all cost of goods, including materials or special packaging, etc.)
Step 3: Determine your promotional price
Step 4: Once all your costs and discounts are set, determine the markup* needed to support the promotion. *Note: Markup will vary from company to company and promotion to promotion.
Step 5: Determine the number of promotions (or amount of incremental sales) that need to be generated to support your promotion. It is always a greater number than the amount of product you would normally sell during the time frame of the promotion. Remember, the sell-in must cover all costs of the promotions and generate a profit.
Step 6: Working with sales, develop sales goals for each customer. Meeting this goal will help ensure promotional success.
Step 7: Monitor and measure sales results. At the end of the promotional period, enter results into the pro forma. By doing this you can utilize your learning to build the next promotional pro forma.
Each time you do this, your promotional plans will become more accurate and your sales results will improve.
Tip: After a while, you and your company will have a complete record of costs and sales results of every promotion, by customer. Use these to fine-tune future efforts.
Want more information on building powerful promotions? Contact us today to learn how we can help you build promotions that lead to financial rewards.