The five promotion methods: what each costs and where each is weak

1. Advertising buys space to put your message in front of people, costing a few hundred pounds for a slot in a local paper and tens of thousands for national television, and its weakness is that the message is one-way and easy to ignore, so you rarely know which sales it caused.
2. Sponsorship pays to put your name on a shirt, a stand or an event, from around £500 for a Sunday league kit to millions at the top of a sport, and its weakness is that you are tied to someone else's reputation, so a scandal attached to the team or the star lands on your business.
3. Product trials give away free samples or a free first month, so the cost is the making cost of every unit handed out with no revenue against it, and the weakness is that many people take the free one and never come back as paying customers.
4. Special offers such as 20% off, buy one get one free and money-off coupons cost you margin on each sale rather than cash up front, and the weakness is that constant discounting teaches customers to wait for the next deal and makes the product look cheap.
5. Branding is slow and expensive to build, because years of consistent design, quality and advertising sit behind it, and although it then costs little to maintain, one poor batch or bad news story can undo it in a week.

Comparing the five methods side by side

The table sets each method against what it actually involves and the job it does best.

1. Read the last column as a running order: the first two buy attention, the middle two buy a first purchase, and branding buys the repeat purchases that follow.
2. The row that matters most to a new business is product trials, because a customer who has never heard of you will not risk money on a product they cannot judge, so handing over one free unit removes the risk at a cost you can count.

Matching the promotion to the market segment

1. The segment chooses the method, not the owner's taste, so start from where those customers already spend their attention and what moves them.
   1. Where they look: a segment of 18 to 25 year old gym-goers is reached through social media, which is how Gymshark grew by selling through fitness influencers, while retired customers in a market town are reached through the local paper and a leaflet drop.
   2. What they respond to: price-sensitive families act on a multibuy or money off, while a segment buying on quality is moved more by sponsorship of something they already care about, such as the local junior football team their children play for.
2. The same £2,000 therefore buys two completely different promotions, a run of targeted posts aimed at one online segment or a full season sponsoring a community event whose spectators are your customers.
3. Promotion aimed at the wrong segment is money spent reaching people who will never buy, because an advert seen by two million viewers is worthless if only a few thousand of them are in your market, which pushes the cost of every customer you do gain far above what the sale is worth.

Judging which promotion suits a small business with a limited budget

1. For a start-up with a few thousand pounds the realistic choice narrows to trials, special offers and tightly targeted advertising, and four things decide between them.
   1. Who the segment is and where they look: a bakery selling to families within two miles gains more from 5,000 leaflets and a free sample table than from any advert those families will never see.
   2. How much money there is: sponsorship and a run of adverts must be paid for before any extra sale arrives, while a discount costs margin only when a customer actually buys, so it is far safer for a tight cash flow.
   3. Whether the aim is a quick sale or long-term loyalty: money off shifts stock this week, whereas trials and branding build customers who return, and a business that needs cash by the end of the month cannot wait for the slower method to pay back.
   4. How easily a rival could copy it: a competitor can match 20% off by the weekend and win the customer straight back, so an offer buys sales but no lasting advantage, while a brand built over years cannot be copied overnight.
2. On balance a small firm with little money should lead with product trials and special offers aimed at one narrow segment, because both convert cheaply and only cost when they work, then move the profit into branding once repeat custom makes the slower method affordable.