When it comes to having sales and promotions for your business, there is no magic bullet or secret formula for success. Every business is going to have different goals, different needs, and different profit margins. However, even though we can’t tell you a 30% off sale will always bring customers in the door, there are a few strategies that have been tested and proven as effective ways to attract new customers or increase sales during slow periods or draw attention to new/special products.
And yes, it is ‘or,’ because generally a sale or promotion is going to have far more success doing one thing than trying to be all things. So, that’s the first thing you need to do when setting up any promotion – decide what your goals are. Maybe you want to clear out told inventory. Maybe you want to capitalize on a holiday or special event going on. Maybe you are trying to appeal to a broader demographic. Whatever the case, having a clear goal in mind gives you the best shot at focusing in on that goal and actually accomplishing it. Plus, if you don’t set a clear goal, you’ll have no way to track your progress and measure success.
Coupons & Discounts
Everybody wants to find a deal, and almost everybody is willing to use a coupon in order to get that deal. As high as 97% of U.S. consumers use coupons when shopping. That’s because coupons are super easy to use, and people might already have them.
The days when “coupons” were synonymous with trolling through all those extra pages in the newspaper with a pair of scissors and some envelopes are behind us. Thanks to smartphones and email, coupons are handy, scannable, frequently on-demand discount codes that we carry around in our pockets at all times –especially in our inboxes.
In fact, 75% of consumers have reported combing through their email accounts to find coupons or discount codes that may have slipped through the cracks. And anecdotally, we all have that friend who refuses to make an online purchase with the “promo code” box blank.
Every business is going to have a different formula for success with coupons and discounts, and as stated above, there is no single magic $ or % off number that will work for everyone. However, here’s what we do know about sales and promotions in the “discount” category:
- 10% to 20% off has not generally been shown to have much appeal to consumers. You’ll probably need to discount more aggressively.
- When offering discounts, don’t cut so deep as to put yourself in the red.
- Discounting your items too frequently creates an expectation that the discount is the norm, and lowers the value of the item in you customer’s mind.
- Discounts can lead to lower customer satisfaction since the discounts lower expectations.
- Discounts can be more effective when marking down many items in a store – the familiar “store-wide sale.”
- Discounts can be more effective in the form of a “flash sale,” where the discount is only available for a limited amount of time.
As you can see, discounts can be effective, but they can also cut the other way. So, you have to be careful to dole out discounts in a thoughtful and specific manner in order to avoid blowback.
Bundles & Bulk
One of the core ways that sales and promotions work is by lowering base prices in order to increase volume. The increased quantity of sales makes up for the lower than normal price per unit sold.
So, in order to accomplish moving a higher volume more quickly, putting together bundles and selling items for discount prices in bulk is a great way to accomplish that goal.
In addition to moving more product being a benefit to you, the notion of buying more and saving more is enticing to the customer. Even if the discount is ultimately small, the customer will feel like they got a good deal. This in part thanks to a bit of psychology. Consumers tend to veer toward positive messaging and away from negative messaging. So even a little thing like telling them they are getting more (vs paying less), provides a subtle push in a positive direction.
Research shows that consumers are far more likely to purchase products online when they are getting free shipping and free returns. 80% of consumers openly say that free shipping makes them more likely to purchase a product online. So, if it is at all possible, you are far better off building the cost of shipping into the price of your products and offering free shipping, as opposed to charging a separate shipping fee. Even if the ultimate total cost to the consumer is the same, they prefer to be getting something for free.
Speaking of getting something for free, giveaways are another great way to attract more customers and promote your business. People love getting freebies, even if the item is of very little value.
This can range from free samples (even been to CostCo on a Saturday?) to free gifts, or a free frozen yogurt after they get ten punches on their frozen yogurt punch card.
Actually, “punch cards” and other loyalty programs offer great incentives for repeat business, and there are several companies that offer digital punch cards and virtual loyalty cards to make it even easier for consumers to get rewards from their favorite brands.
Need help coming up with your overall marketing strategy or some tactics for your next sales promotion? Contact 10twelve today for a free 30-minute business strategy session.