Are you Losing Money by Promoting Your Own Products?
It is typical for most Brands to go for promotional sales every now and then to state occasions such as Stock Clearance, New Arrivals, special discounts. Promotions are lucrative as Brands generate more revenue in the short run due to increased sales volume. These short-term sales figures seem attractive. In this article, we will look into how the lack of proper insights cause companies to lose money by promoting their products and how successful companies deal with this problem.
Why do Businesses Spend Big Bucks on Product Promotions?
Promotion is a way of interaction between the buyer and the seller where the latter tries to persuade the buyer to purchase their products. It increases the awareness of a product, service or Brand. It also enhances the public image of a company. This method of marketing creates interest in the minds of buyers and generate a dedicated user base. The following are the objectives that a Brand wants to fulfill through Product promotion:
- To provide information about the availability of the features and uses of the product to the prospective buyers.
- To stimulate the demand for a product by creating awareness and interest among the customers.
- To differentiate the product from the competitor’s product by creating brand loyalty.
- To stabilize sales by highlighting the importance and features of the product.
Product Promotion can be Informative, Persuasive, Reminder, Buyer Behavior Modifications. Sales promotion majorly includes Advertising, Personal Selling, and Sales Promotion.
How Can Product Promotions Go Wrong?
Product promotions always do not prove beneficial especially when it is not done the correct way. The following are the reasons for unsuccessful Product Promotion:
- Your target audience might not be optimized
- Your product pricing may not be optimized based on current market trends
- You may not have analyzed the market demand data well, and your product may be less in demand than you anticipated
- Your ads might not have updated inventory data, and you might be running Ads of products which are actually out of stock
- Your competitors might have come up with a better product.
- Your logistic partners might not deliver to the geographical locations in which you are running your ads
- You might be running ads in the wrong platform, and an alternative platform might have yielded better ROIs
- You may be spending more money on a product which is not getting traction and spending less on the one which is.
- You might have missed out on a lot of hidden costs while calculating your ad budget and as a result might end up having negative ROIs from your promotions. The hidden costs involved in Product promotions can be listed as:
- After-sales service costs
- Installation cost
- Extended warranty costs
- Logistics charges like Express Shipping
- Product return charges
- Discounts and cashback offered
- EMI charges involved
- Payment Gateway charges involved
Challenges that companies face while optimizing their Product Promotions
Companies usually use a lot of apps and tools to automate, optimize and manage their various processes like using inventory management apps like Olabi, Vinculum, Unicommerce, CRMs like Salesforce, Zoho, Leadsquared, Online advertising platforms like Google Ads, Facebook, Twitter, Linkedin Ads, e-commerce platforms like Shopify, Magento, Woocommerce, Amazon, Flipkart, payment gateways like Razorpay, PayU, Chat Interfaces like Zendesk, Tawk.to, cloud telephony services like Exotel, Knowlarity to name a few.
Now separate sheets need to be downloaded from all these different sources from which detailed reports need to be created. So all of the inventory data, customer feedback, customer behaviour data, payment gateway data need to be appropriately analyzed to develop a consolidated picture based on which product promotion campaigns need to be optimized. This process takes a lot of time and manpower to execute manually and most of the time, leaving room for improvement. Moreover, the time lag involved from data mining to data analysis costs a lot of money as the promotional activities keep on running the entire time.
How Daton Helps Brands Get The Most Out Of Their Product Promotions?
Daton is an automated data pipeline that easily integrates with various sources that a company may be using. It can automatically store data into a data warehouse without the need of any coding, enabling the creation of reports in quick time which can be easily analyzed to optimize the product promotional campaigns to maximize ROIs from them.
Brands cannot survive in the market without having a good outreach. Without Product Promotions, they cannot inform customers about the unique benefits of their products and lose out to other market players.
Click Here to get a free trial of Daton and learn more ways in which Daton can prevent you from bleeding out money in product promotions.