A promotion is any event or action designed to increase awareness and purchase of your products and services. Promotions can be anything from sales, sales events, promotional items and more.
Some more common types of promotions include:
As a by-product, all promotions should increase customer loyalty. In business terms, "loyalty" means a customer will buy… and then come back and buy again.
The three basic types of customer loyalty are:
- Purchased loyalty. A great example of purchased loyalty is a rewards program. You can also purchase loyalty through memberships, coupons, or rebates. Purchased loyalty occurs when customers are "paid" to be loyal. In many industries and market segments purchased loyalty is a great strategy. The problem with purchased loyalty is that customers can be "bought" from you by competitors. If a competitor offers a better deal your customers will start doing business elsewhere.
- Convenience loyalty. Some customers are loyal to you simply out of convenience. Convenience loyalty is great unless a competitor offers greater convenience.
- Service and brand loyalty. Real, long-term loyalty occurs when customers are satisfied and see no reason to buy from another company. For instance, some customers may be so happy with your services they cannot imagine shopping somewhere else. True loyalty is the holy grail of commerce and is what every business hopes to achieve.
Promotions help you engage customers and over time turn them into long-term, loyal fans of your company. Satisfy their needs and they may not be able to imagine doing business anywhere else.