Profitable promotions

I just got the link to this very interesting article on sales promotions from the MIT Sloan Management Review that some of the folk selling wine may find useful: "Any sales promotion worth its salt will increase sales, but creating a profitable promotion is more difficult."

Among various other examples, the article compares GM's 2005 "Employee Discount for Everyone" summer pricing promotion (quickly copied by Ford and Chrysler), to the Cadillac Under Five challenge which aired during the Superbowl (following the promotion, sales of the Cadillac V-series jumped 25%!).

Based on the results of their research, the authors propose three features of successful (profitable) sales promotions:

• It provides the sponsor with a period of exclusivity because it precludes or delays imitation but encourages quick buyer response.
• It does not rely on discounting alone, but communicates something about the company, the brand, or the specific goods or services offered.
• It is launched by companies that have some differential advantage in the marketplace already.

Especially important, in my view, is creating the opportunity for the buyer to respond easily and quickly to the promotion - and here's where the web can really help out...