Sales promotions are one of the most powerful marketing tools available to any retailer.
By definition, a sale is supposed to influence the consumers’ buying behavior by incentivizing them to come to your place of business to receive a predetermined benefit during a specified period of time.
The benefit to consumers can take many forms. It could be a free gift, a reduced price on specific items, an added value (buy one, get one), an opportunity to support a local charity or organization, a chance to see a new product, etc.
If all goes well, a sales promotion will have a positive short-term influence on sales. The long-term benefit of a successful sale is to attract new customers to your store that will, hopefully, become repeat customers.
Here are a few things to consider to make your next sale a success.
What is Your Intent?
Do you have a particular goal you are trying to reach with your sale? Are you trying to attract first-time customers or re-engage with current customers? Are you announcing a new product or service? Are you trying to build traffic during a slow season or day of the week? Being clear about what you are trying to accomplish will help you determine how you reach out to your intended audience.
The Value of Your Proposition
If your promotion doesn’t offer sufficient value to make customers step out of their routine to come to your store, no amount of planning and promotion will make your sale a success.
You could slash the price of a desirable item to drive traffic through your door, but why do that if there isn’t some reasonable expectation that you’ll be able to make up the difference on accessories, consumables, or other add-on items, to achieve your stated goals for the sale?
Your offer needs to be a win-win for both you and your customers. When you find a promotion that customers are interested in, ask yourself if you can afford to give it to them. If not, look at ways you can modify the offer so it becomes advantageous for both your organization and your customers. You may find that bundling items together or partnering with suppliers will help make your sale pencil out.
Promote Your Promotion
Once you’ve defined your audience, it’s time to spread the news about your sale through the appropriate media.
Rally your current customers with:
- In-store signage
- Word-of-mouth by employees
- Flyers through slipped in with purchases
- An email or phone campaign
- Attract new customers with:
- Newspaper ads
- Website announcements
- TV commercials
- Radio ads, etc.
Be sure to start promoting your sale far enough in advance so your audience can get the message multiple times before your sale begins. Timing can make or break your sale.
The Psychology of Scarcity
Research has shown that the perception of scarcity can make anything more desirable.
In 1975, Stephen Worchel and his colleagues put two identical jars of equal size before participants. One with two cookies, one with ten cookies. Even though the cookies themselves were identical, subjects found the contents of the jar with two cookies more desirable because these cookies were perceived as being in short supply. These results have been repeated multiple times since then.
As you can see, scarcity is a strong psychological trigger. We humans pay attention when we feel we’ll miss an opportunity to attain something that would normally be out of our reach or unavailable at a later date. A promotion with a limited-time offer or tied to a limited-quantity item will trigger that sense of urgency in the consumers you are trying to reach.
The Big Money is in The Small Things
You’ve targeted your audience, promoted your sale, and customers are streaming through the door. Congratulations! Not only have you created a successful promotion, you have also created an amazing opportunity to generate some add-on sales and do some up-selling.
Chances are, you’re making little (or nothing) on the sale item. So, send it out the door accompanied by one or more accessories. That circular saw may come with a general purpose blade, but the customer who intends to use it to slice into a sheet of plywood will thank you for sending her home with a blade designed to cut with minimal splintering. Their project will look better; you’ll save them from frustration, as well as an additional trip to buy the correct blade, and they’ll remember the recommendation by the expert at your store. It will be possible to turn a profit on a sale that might not have otherwise generated one. If they’re going to need extras, they should be buying them from you, not a competitor. Get ‘em while you got ‘em!
Why not point out the beneficial features of similar items that are not on sale? Once consumers understand the advantages, it might be in their best interest to purchase the more expensive item. Train your staff and incentivize them to take advantage of the opportunity you have created.
Automate the Markdown Process
Paladin users have the ability to automate all the price changes. The PromoBuilder™, a tool built into Paladin Point of Sale, allows you to set up your sale weeks or months in advance. Reduce prices for individual items, entire classes, or whole departments with a few mouse clicks. Once the end date of the sale has passed, all sale prices are automatically returned to their normal price. PromoBuilder will give you extra time to focus on promoting your sale, training staff, ordering additional inventory, and everything else you need to do to get your store ready for the big day.
With a little advanced planning, your promotions can help your business in a variety of ways. A well-executed sale can enhance your visibility to consumers, help you showcase your knowledgeable staff, and highlight the variety of services you provide to customers in your community. To maximize the benefit to you and your customers, don’t overlook the opportunity to engage with customers, determine what they are looking for, and send them home happy in the knowledge that they found exactly what they need.
Head over to paladipointofsale.com to find out more about PromoBuilder™ and other features of Paladin Point of Sale.
By George Maginnis