The problem with promotions

I find promotions in marketing to be a very fine line that marketers have to walk.  They have the opportunity to drive incremental sales, and really help you grow and accomplish your sales goals by adding an additional incentive to push the deal in your direction.  They also run the risk of becoming the norm and expected, and if you don't have a promotion, then you risk losing the deal.

Personally I think promotions are used in the wrong way too often.  In Seattle, Sleep Country USA is always running a promotion, it just changes over each week.  But, it means all they are selling on is price and "deal".  When I went in there to buy a mattress, it wasn't the promotion that led us to make the purchase.  It was really the service and the quality product.  Unfortunately their marketing is so based on promotions that they aren't able to market on these other items (which could probably help them get slightly higher prices).  We see this same thing with Coca-Cola and Pepsi.  When was the last time you paid full price for a 12-pack of Coke?

In order for a promotion to really be successful, it has to be used properly.  If it is used to get to a price, then it's not a promo, it's just artificially lowering the price to the market price.  If it is used to take a customer that is on the fence, and put them firmly in your corner (all other things being equal), then it is an effective promotion.  But before that can happen, you have to sell the customer on things that are not price.  It needs to be getting the customer to lean your way based on unique technology, a certain competitive advantage, a quality perception, things along that line.  Then, adding a promotion (be it a special discount or a $0 item) can finalize the deal.

If you are designing promotions that your sales team is using early in the deal, or at a point where they are not really down to the final negotiations, then you have a problem.  The promotion is not being used to win the deal.  It's being used to compensate for something else that they see as lacking, and really sets it up for failure.