Defending the Promo

An article in the Wall Street Journal yesterday slammed most common approaches to marketing, with a special shout-out to promotions. I take issue with a lot of what the guy (David Corkindale, an Australian Marketing Professor) wrote, because he failed to look at the big picture.

Here’s what he said about promotions: “Promotions bring in extra, worthwhile business. This is often true in only a limited way. There are some good reasons for running promotions, like unloading stock that might otherwise become redundant. But a reason often cited by marketers to justify a promotion is that it will bring in new customers who will become loyal buyers at the regular price.

What actually happens is that promotions mostly attract people who already were customers, so the company ends up giving a discount to people who would have bought anyway. New customers attracted by a promotion usually don’t become frequent customers.”

Yeah, that’s true for price promotions, like the grocery warfare Coke and Pepsi wage on a weekly basis. But does he think there’s only one approach to promotions? Price promotion is the heroin of display placement. But it’s just one example of what smart promotional marketers do. Different results require different promotional approaches. Loyalty programs, such as United Mileage Plus, have excelled historically at both retention and acquisition of customers while building a platform for delivering timely sales incentives and rewards that build loyalty. And it