Running a promotion is one of the most powerful tools for business growth, but when done wrong, promotions can seriously harm your business.

That's why, in today's episode of The Growth Pod, I'm sharing my exact strategy for growing a business with successful promotions.

Specifically, I share:

• Why discounts are harmful to your business.
• How to escape discount dependence.
• My step-by-step process for a successful promotion.
• The secret promotion strategy for growth.

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About Angela

Angela Frank is a fractional CMO with a decade-long track record of generating multimillion-dollar marketing revenue for clients. She is the founder of The Growth Directive, a marketing consultancy helping brands create sustainable marketing programs.

Her new book Your Marketing Ecosystem: How Brands Can Market Less and Sell More helps business owners, founders, and corporate leaders create straightforward and profitable marketing strategies.

Angela is the host of The Growth Pod podcast, where she shares actionable tips to help you build a profitable brand you love.

Welcome to The Growth Pod.

Today we're checking in one on one to learn how you can strategically leverage promotions to grow your business without creating a dependence on discounts. I'm your host, Angela Frank. I'm a fractional CMO and founder with a track record of generating multimillion dollar revenue for my clients.

So if you're like me and you love learning about how to grow your business more efficiently, you've come to the right place. Today we're chatting promotions. And when used correctly, promotions are a powerful way that you can boost sales for your business.

However, when you use discounts for your promotions, they can become deadly for your brand. So that's why today I'm sharing exactly how you can leverage promotions strategically to grow your brand without impacting your cash flow.

So let's start with why you need a promotion strategy. Because discounts are so powerful, I've seen many brands that essentially become addicted to them.

I know that you've seen a brand that no matter when you go to their website, they're always running a sale.

Their back to school sale becomes a fall sale, Halloween sale, giving thanks sale, Black Friday, Cyber Monday sale, holiday sale, winter sale, and on and on and on.

So if you are hearing this and you realize that you might be running discount promotions more often than you want, how can you improve improve upon what you're currently doing? First, let's start by understanding the two elements of a promotion that make them really successful.

The first one is scarcity, and the second one is urgency. Scarcity means that you have a limited quantity available. There's not a lot of it. The resources are scarce, the availability is scarce.

And urgency means that they have a deadline when they need to make a purchasing decision.

By so that's when you're saying, you know, only available through Friday, only available for two weeks, you're really making it that they need to make a purchasing decision as soon as possible. As humans, we really don't like missing out.

And so when you see something that's very limited, meaning it's scarce and it's very urgent, you're forced to make a snap decision. And usually this means that you're making an impulse purchase so you don't miss out.

Now, when a brand runs constant discounts, it eliminates the urgency of purchase because buyers are trained that there will be another promotion. And so they have plenty of time to think about it. If you go to that website and you're like, well, you're back to fall sale, 25% off.

I know you're just going to run it again next month as a Halloween sale with 25% off, I don't really have a reason to make a purchase.

So how do we escape discount dependence? Well, let me define that. If you're a brand who runs a sale more than two times a year, you might have a discount dependence. But there's good news.

You can use a simple strategy to escape sale dependence. The first step is brainstorming a list of value ads that you can use to provide value to your customers.

And the second step is think of ways to introduce scarcity and urgency.

When you combine both of those, you're going to create a supercharged promotion and you're really going to get give people a reason to check out and make a purchase with you.

When you combine those two, you're going to create a supercharged promotion, which really creates a strong reason for a prospect to pay you and become a customer. So let's take a look at what this could look like in practice.

Let's say that you're a physical trainer and you normally sell an online fitness membership. Currently your customer lifetime value is around $200.

When you look at a value added promotion, you could offer perhaps lifetime access to your entire fitness library. And I would that for about $397.

But when you make this promotion only available during a two week period and it's gone forever, now you're introducing that urgency for people to buy.

So you're creating supercharged value for someone by giving them lifetime access to your entire fitness library for one payment instead of a monthly payment. And you're creating a reason for someone to buy only during a two week period.

Perhaps you could also add on top of that and say only 50 people are going to get access to this. So if you want to be one of those 50 people, you need to buy in this two week period.

Otherwise you'll never be able to have this offer available to you again. So you can see here the other benefit of this is that you're actually increasing your customer lifetime value.

So if your customer lifetime value is $200, meaning that they stay with your monthly membership until they've spent about $200 and then they cancel. But now you're offering your entire fitness library for $397, you're actually increasing your customer lifetime value.

And when you do that, you have improved your cash flow, but you've also escaped discount dependence. Now, the next step in this is to use your promotions strategically. So ideally, you wouldn't be running promotions more than once per quarter.

So even though you've escaped discount dependence, increased your customer lifetime value, and created a situation where instead of discounting something and negatively impact impacting your cash flow, you're positively impacting your cash flow, you still only want to run promotions two to four times a year because they take a lot of planning to run correctly and a lot of time and resources invested into making sure that this promotion is going to be as powerful as it can be for your brand. And when you're planning for a promotion, you need to consider a few things. The first is, who will be eligible for this promotion?

Is it going to only be available to people who are purchasing from you for the first time? Will it be available to existing customers? Or will it be available to everyone?

The second thing you need to consider is how will we promote this promotion? For example, are you going to run paid ads for a limited window to try and get more people in the door to see the promotion?

Will you run everything as normal and you'll only advertise the promotion on your homepage? And on top of that, what is going to be the time period of your promotion? Generally, one to two weeks is best.

Or you can do something that I love, which is a one to two week period of hype for the promotion that you may make available for a limited window. So you say, you know, we're going to run this amazing promotion. It's going to be available only for 48 hours.

And so here's all the information you need to know.

And as you get closer to that promotion, your marketing materials get more hyped up, you're getting people so excited, and your open cart is only for a very limited time. The reason why I love that strategy is because any promotion that you're running, there will always be a huge influx of sales at the beginning.

So let's say you're running it for seven days.

Those first couple days you'll have an influx of sales, then things will kind of peter off and you'll have a lot less sales for the middle part of that promotion. And then usually that last day or two, you'll see a spike in promotion redemption as well.

And so when you compress your promotion period to something very short, like 48 hours, you're encouraging everyone to check out and you're not really needing to continue to rehype people over a one or two week period. One more thing you need to consider when you are planning your promotion is what are we going to learn from or test during this promotion?

Just like all of your other marketing channels, you want to continue to see how you can improve promotion over promotion.

So by setting out from the beginning with an intention of what you're trying to learn or test during a promotion, you're going to continue to improve upon promotion after promotion after promotion, and each one you run will be more successful than the last. Once you have all four of those steps figured out, you're ready to start creating all of your marketing assets and preparing for your launch.

We used one example for this episode which is offering lifetime access for subscription model product. But there are some other alternatives as well, so I want to give those to you now. One is a bundle discount.

So instead of offering maybe lifetime access, you say you can purchase more than one item, which is increasing that transaction value and boosting your cash flow. But because you're offering a bundle, you give a little bit of a discount with that.

So you're getting a boost in cash flow, you can give a little bit of a discount. The other thing you can do is offer limited time drops.

So maybe you are running a promotion where your sweatshirt is available in a limited color run, you only have 100 available or only 25 in each size or something like that to make it super limited and super coveted. Knowing that you're never going to release this color or style again.

You can do that obviously with clothes, but you can also offer different models of products or accessory add ons for a limited time as well.

I really encourage you to think about how you could maybe use a limited time drop in your business, even if you're not selling something that's product based. And then another option would be to provide exclusive access to products, services or content.

So you could come up with something entirely new and offer it for unlimited time only. And that's only available once.

So now instead of saying, you know, for example, you have access to my entire fitness library, lifetime access, and that is our exclusive access, you can say, I've created an entirely new course and you can only get access to this course for this two week promotion period and then it's gone forever. And you could use that as a value add or just exclusive access during your promotion.

So those are a few alternatives, but there's one more and it's my favorite promotion strategy ever. And that is referrals.

A referral program is an always on promotion strategy, meaning that when someone becomes a customer, they'll have a window of time to refer you new business and new customers. And this is one of the only times that I'll actually recommend giving a discount or a gift card or a cash incentive.

Normally I don't recommend this because it impacts your cash flow, but it's okay for referrals. And here's why.

When someone is engaging with one of your promotions, they've come in through a marketing channel, meaning you've spent resources, time and money money to acquire that customer. However, when someone refers you business, you haven't spent anything to acquire that customer.

So you actually can afford to provide a discount or kickback without negatively impacting your cash flow.

But just like with your other marketing channels, you need to continually test your referral promotions to ensure that you are creating the juiciest offer. One for your client who is referring you the business and two, for that referral to actually go through and become a customer of yours.

So I recommend looking at your referral referral program monthly and continue to improve upon it month over month.

And you always want to be pushing the envelope here to see if you can improve your referral percentages and your closing rates on your referrals specifically. That's this episode on creating supercharged promotions. Thank you so much for listening and I look forward to seeing you in the next one.