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BEST PRACTICE: Using sales promotions

We're all consumers so we're familiar with sales promotions in the B2C arena. Trade promotions are simply sales promotions targeted at trade customers as opposed to the general public. The concept is exactly the same; to encourage people to buy your products or services rather than those of your competitors. As Chris Bestley, education consultant to the Institute of Sales Promotion (ISP), says: “The techniques are the same whether you're talking about trade or consumer promotions. The basic philosophy is that you're offering an incentive in return for action.”

Current spend in trade promotions is very healthy; Jan-Pieter Lips, head of B2B at Loyalty Management UK, which operates Nectar for Business, says: “Spend by corporate users on high street vouchers alone is £600 million per annum.” The market is huge and growing, but because trade promotions operate in the B2B arena, they tend to be rather hidden.

Trade promotions do feature in the ISP awards but make up only about 10 per cent of the promotions reviewed. This may be because firms don't realise that the ISP Awards are open to B2B as well as B2C, it may be because the consumer side appeals more to the sort of people who would enter promotions into the ISP awards, or it may be because the B2C arena is considered more glamorous. As Philip Penlington, account group director, Fotorama says: “The fact remains that, for many firms, trade promotions tend to be the poor relation when it comes to budgeting, particularly for those businesses which operate in both B2B and B2C arenas.”