So there sits your product. Sure, some people are buying it, but your product’s account manager and business development manager sure would like more people to buy it. What’s a product manager to do? Why not do what everyone else seems to be doing – have a promotion for your product? Hold on a minute, if you do a promotion wrong, you’ll end up damaging your brand and losing money. This was never part of your product manager job description. What’s the right way to do a promotion?
The Problems With Promotions
If you decide to offer a promotion for your product, clearly you are going to move more product. Studies have shown that in the world of retail, up to 40% of sales for some segments of goods are promotion driven. Although this might start to sound like a silver bullet, it’s not.
Along with their benefits, promotions create a lot of problems for product managers. One of the biggest problems is that your customers are constantly being hit with promotions these days. So much so that they have started to become desensitized to them. There is a very good chance that they are starting to only buy when a promotion is happening.
Additionally, since you are selling your product through multiple channels you need to be very careful when you start to use promotions. Your customers are web-savvy shoppers and they may end up combining your mobile, Groupon, Twitter, and Facebook promotions in ways that you never intended them to.
Know Why You’re Doing A Promotion
First off, every product manager needs to have a very clear understanding of just exactly why they are doing a given promotion. What do you hope to accomplish by conducting this promotion? This calls for some strategic management of your product’s promotions. You can have any one of multiple goals. These can include driving traffic to a store or a web site, boosting your brand image, attracting a new market segment to your product.
Likewise, how does the promotion that you are planning on conducting fit into your overall marketing plan? The experts tell us that using a fewer number of strategically planned promotions can provide a product manager with a greater benefit than doing a whole bunch of promotions with no plan.
Make Sure Everybody Knows What’s Going On
One of the biggest problems that product managers run into with running product promotions is actually one of the simplest to solve – poor internal communication. The two big problems that product managers have with promotions, conflicting promotions and the unintended combinations of promotions, can result in the destruction of your product’s margins.
Take the time to make sure that everyone in the company knows about the promotion: what it is, when it starts, and when it will end. A great way to go about doing this is to have one common promotion calendar that everyone uses. This will help to prevent overlapping promotions.
Make Sure That You Can Forecast What Will Happen
The final issue that can trip product managers up when it comes to product promotions is inadequate forecasting. This has always been difficult for product managers to do correctly. When you throw into the mix the side effects that promotions can cause such as halos, cannibalization, and time-shifting effects it gets even harder.
The arrival of improved computing horsepower and sophisticated promotions forecasting applications now allows product managers to accurately see into the future. The result of using these new tools is that product managers should be able to do a better job of delivering sales, providing higher levels of service, boosting customer satisfaction, all while keeping product inventories lower.
What All Of This Means For You
Our customers live in a very nosy world. No matter how good our product or service is, there’s a very good chance that they’re not going to hear about our product. We need to do something to fix this problem. One way to do this is to hold a promotion for our product.
Promotions can be powerful, but we need to take the time to make sure that they are done correctly. This means that we need to make sure that we understand why we’re doing the promotion. We need to make sure that everyone in our company knows that the promotion is going on and what it means. Finally, we need to make sure that we take the time to create an accurate forecast of what the benefits that we believe that the promotion will bring to us are.
If we can correctly manage the next promotion for our product, then there is a very good chance that we can add this to our product manager resume and take our product and make it the best selling product at our company!
Question For You: How many times per year do you think that you could run a promotion for your product?
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What We’ll Be Talking About Next Time
All too often Product Managers fool themselves into thinking that more is better. Yes, sometimes this may be true, but when it comes to keeping track of both customers and product inventory, it turns out that using one database is the key to long term success…