Impact of Advertising & Sales Promotion in Revenue

              While the two terms are often used interchangeably, advertising and sales promotion designate different parts of a business's marketing strategy. Advertising has to do with building brand recognition and taking measures to build long-term profitability, whereas sales promotions are shorter-term strategies that infuse immediate revenue into a business by directly affecting the price of goods or services. While both can potentially affect revenue, sales promotions have a direct connection to the amount of money your business brings in.

Increasing Value

Advertising can help your business to increase its value and build its reputation. This can happen in two ways: either through the purchase of advertising space in magazines, newspapers, social media or other outlets, or through editorial coverage. Ideally, editorial coverage is the aim of many small businesses. It costs you virtually nothing and can have long-lasting impact on building your firm's reputation. Essentially, this is about garnering public relations. Make contacts with your local newspaper, community organizations, and social clubs. Take part in promoting nonprofit events or sponsor a Little League team. All of these are ways to get your business's name out in the public without spending money directly on advertising.

Brand Reputation

Apart from these more traditional means of increase brand value, your business should also be concerned with its brand reputation. A solid brand reputation will directly affect revenue, as customers will feel safe and secure in purchasing goods and services from your company. Reputation management is about understanding the influence of customer perceptions on your business's revenue prospects. The idea here is to manage customer expectations, to respond quickly to problems or issues, and to always conduct your business in an ethical way. This concern with reputation should extend through all forms of marketing and advertising and your approach to customer service.

Sales Promotions

Sales promotions are meant to directly drive revenue. There are many ways to go about sales promotions, and all of them have to do with communicating an added value or incentive to your consumers. For example, you can offer a free trial of a product or service, issue coupons, offer rebates, or hold contests for free goods. All of these methods aim to get customers into your business to spend money.

Bringing It Together

As you might have guessed, marketing, advertising and sales promotions do not exist in isolation. Businesses need a good mix of all of these methods to encourage both short- and long-term revenue and growth. The goal is to keep your business profitable and to keep a good reputation in the community and among your current and potential customers. By balancing value-increasing activities with a direct investment in advertising and sales promotions, businesses can prosper.