Running Sales Promotions to Increase Your Growth
For today’s post I wanted to share a few ideas for a particular area of selling … promotions.
Why Run Promotions?
Promotions don’t always have the best reputation. One to many ‘never-ending sofa sales’ can make the very idea of promotions seem comical, even tacky. The simple fact is that not every type of promotion will suit every business, it’s not a ‘one size fits all’ solution. There are however different types of promotion, so with a little experimenting you could find the perfect fit for your brand.
But why run a special offer at all?
Your products are amazing so shouldn’t people just buy them as intended? Well, the problem is competition. Consumers and trade buyers have a whole world of choice and you need to stand out. Before we delve into the types of promotion let’s review the benefits.
- A special offer gets people excited and gives people a reason to look at your products.
- Promotions with a deadline give customers an excuse to act quickly and buy.
- A promotional event gives you a reason to reach out to your customers.
- If you dislike being the sales person a special offer can give you a gentle selling approach. You can focus on your offer and giving a great deal rather than making the sale.
- Dreaming up imaginative promotions for your business is a great way to unleash your creativity.
Not too bad eh? Some good reasons to put a promotion in place.
Promotions generally fall into 2 categories; discounts and offers. A discount will be financially based, where an offer could mean no reduction in price at all. Which option you choose will depend entirely on your business model, pricing, stock and how you wish your brand to be perceived. Let’s start off reviewing the discount model.
Consider a Discount
The most easy to implement discount is a flat discount. You simply offer 5% or 10% coupons to your customers. The effectiveness will depend on your customers and products. It’s worthwhile testing different levels to see what works best for your products. You don’t want to immediately go for a high discount if a lower one would be just as profitable.
If you don’t want to offer a business-wide discount you could consider a product specific discount. This can be particularly effective if it’s timely; seasonal products such as calendars would be particularly popular in the run up to the New Year. Similarly if you’re launching a new product you might want to give a special discount for early bird buyers.
Decreasing discounts allow you to reduce the size of the discount as the sale progresses. 20% on day one, 15% on day two, 10% on day three etc. The sense of urgency gives buyers a reason to act fast, great if you want to encourage quick action. The decreasing discount is also ideal for a fixed time period such as the last shopping weekend before Christmas. Decreasing discounts might also be an interesting to try at a trade show where buyers may have a set budget. The continual change in the offer also means this type of sale gives you a perfect excuse to keep communicating with your customers.
Easily visible in the cash & carry stores, the ‘buy more, save more’ option offers increasing discounts linked to how much a customer spends. A great choice for direct-to-trade sellers where it’s all about big orders. For small boutiques, this could be adapted to encourage consumers to buy multiple items rather than just one. By creating bundles of seasonal products, which are offered with a discount you can offset the lower profit margin by selling more.
The last type of discount I want to share is ‘VIP deals’. You can try offering early access or higher discount rates to important and loyal customers. These could even be offered as an incentive for joining a mailing list. The VIP deal is a great reward for encouraging repeat customers. Building a community of people that are invested in your business and are rewarded for their interest.
Reducing product prices is not always going to be an option. If this is the case with your business as a whole or a specific product range it’s worth considering other types of promotion. Next I’d like to share a few ideas that don’t require you to drop your prices.
Popular at Christmas time is ’cause marketing’ whereby a business will link an offering to a charity or cause. For every sale you offer something in return; this might be a percentage of the profits or a like-for-like product donation to a local school or charity. While it is an effective way to promote a product range it also has the added benefits of helping worthy causes and allowing businesses to link up with charities they care about.
Common with designer beauty brands is the ‘gift with purchase’. When a customer purchases a certain product or bundle of products they are rewarded with a gift. The success of this style of offer will depend on your product range. It’s a great option for the beauty or skincare market where a freebie trial version of a product could lead to you selling a full-sized version at a later date. Try testing different free gifts, it will help keep the offer exciting and see what free gift works best for your business.
In the online world, the free delivery promotion can be very tempting. If you’re website statistics are showing customers dropping out of a purchase at the delivery stage you may want to consider a free delivery event. You could even offer upgraded delivery during key shopping events for last minute customers. For trade focused businesses this might be adapted to no minimum orders and free delivery during key buying times such as trade shows, Christmas or Spring. Allowing for last minute ‘top up’ orders during busy times. It may not have a huge effect on your balance sheet but may generate good will and repeat orders from customers during stressful times.
Christmas is also a perfect time to consider ‘free gift wrapping’. This could be an actual gift wrapping service at busy times such as Christmas or Valentine’s Day. Alternatively if people are buying gifts you could include a card, wrap and ribbon as a bonus. While you would have to factor in the costs of labour and materials, free gift wrapping provides added value without a price reduction.