Monday, May 12, 2025

Sales prefers Promotions over Advertising

Sales teams in a company love promotions more than advertising. Why? Because promotions let them “see” the results of the money “spent” on the accompanying campaign. I’ve put “spent” in quotes because sales managers typically view advertising as an “expense” rather than an “investment.” That’s why they favor promotions: they can clearly measure their impact on sales, something advertising doesn’t allow, at least not with the same precision.

This preference, however, exposes a deep-rooted mistake among sales leaders—whether Sales Directors, Sales Managers, or Commercial Representatives: they prioritize the gifts over the advertising essential to publicize the promotion and persuade potential customers to participate.
 
When I started working at this major agrochemical company, that was the first thing that struck me. As Head of Advertising, I managed a hefty budget of 200 million pesetas (about 1.2 million euros at the time, in the 1980s), part of which went to promotions. But how was that money allocated?
 
Ninety percent of the promotion budget went to gifts. Sales leaders believed that the more expensive and appealing the prize—or the more giveaways offered—the greater the customers’ eagerness to join in, leading to higher product sales. But how did potential customers even learn about these promotions? Advertising to spread the word received just 10% of the budget.
 
There was a glaring imbalance between the funds allocated to prizes and those invested in communication. They assumed “word of mouth” was enough to get the message out, perhaps supplemented by a stray ad, a poster at sales points, or a commercial letter sent by mail. Back then, there were no computers, mobile phones, or emails, so mailing letters was as routine as sending promotional emails is today.
 

A journey through the history of the pharmaceutical industry and one of its great laboratories that had its origins in Alfred Nobel...
“From Alfred Nobel to AstraZeneca”: https://a.co/d/9svRTuI

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