Live from NEMOA: Sales Promotions a Subject of Debate

Sep 22, 2006 4:11 AM  By

Saratoga Springs, NY–Sales promotions or no sales promotions? That was the question posed during a session at the New England Mail Order Association Conference here. The answer depended on whom you asked.

A pair of panelists–Joe Cassidy, a direct marketing consultant with Manchester, VT-based marketing services firm John Arlotta & Associates, and Phil McAvoy, founder/principal of East Walpole, MA-based direct marketing consultancy PJM Associates–answered questions about the viability of sales promotions and then heard answers from a survey conducted by list services firm Mokrynskidirect.

The differing viewpoints of Cassidy and McAvoy were evident from the first question: How often should mailers be using special promotions during the year?

“Every promotion should be a special one,” Cassidy quipped. “At the low end, it should be done every time there is a mailing. At the high end, it should be 24 hours a day, seven days a week, 365 days a year.”

McAvoy, however, described special promotions as “a drug” and said that “they shouldn’t be used to solve other problems in the business.” When an audience member countered, “Consumers expect a promotion,” McAvoy explained that he wasn’t against promotions altogether. “They’re a weapon in our arsenal,” he said. “You want to do promotions for a strategic reason.”

The survey found that 24% of respondents said special promotions should accompany every mailing, 15% said they should never occur, and 34% said between four and six times a year. Fifteen percent of the mailers surveyed said they hadn’t used any special offers or promotions in 2005, up from 4% the previous year.

“Free shipping is there and everywhere, and it’s increased dramatically,” Cassidy said when asked if more marketers were using promotional techniques. McAvoy said that free shipping shouldn’t be used “as a knee-jerk reaction to a soft business.”

The survey found that 36% of mailers require a minimum order value with a free shipping promotion, 17% with a gift with purchase, 17% with a dollars-off promotion, 15% with a percentage-off promotion, and 12% with sale pages or items.

Should our industry be increasing or decreasing our use of promotional techniques? Cassidy said it should be increasing the use of promotional techniques “because it works” and “because that is what the marketplace demands.” He added that promotions are a “vital part” of growing a company.

Should marketers use a different promotional strategy for their Websites than for their catalogs? “Clearly, there should be different marketing strategies,” Cassidy said. “Free shipping is more powerful online.” But McAvoy again disagreed, saying that different marketing strategies creates “brand confusion” and “erodes credibility and trust in the brand.” He added: “To me, it’s one customer, one brand.”

Which promotional technique offers the highest lift in response for catalogs? “Free shipping,” Cassidy said. “It excites the customer. Customers are crazy about free shipping.” In fact, the survey found that 29% of marketers reported a lift of 10% or more when using free shipping. The next most-effective promotions, in descending order, were percent off, sale pages/items, gift with purchase, and dollars off.