There are many reasons why running a sales special can increase a small business’s profits and brand awareness.
Offering a discount in price is one way to increase short-term sales, move out-of-date stock, reward loyalty in customers, or otherwise reward customer behavior that benefits your company’s bottom line.
Sales promotions, however, are often a better solution than just discounting in terms of higher profits and returning customers.
Sales promotions can include contests, coupons, freebies, point-of-purchase displays, prizes, product samples, and rebates.
With so many types of sales discounting and promotions available to your business, how do you choose which to use?
Start by following the steps below to ensure that your sales special becomes a success.
1. Identify your target customers. Who comprises your customer base? Perhaps you own a tourist shop on the beach, and your biggest customers are impulse shoppers and passersby. In this case, your sales special should be advertised primarily in shop windows or street corners.
On the other hand, if the majority of your customers are online shoppers, then focus your attention on internet banner ads and email subscription newsletter announcements.
In addition to making full use of your product promotions, identifying your target customers will also help prevent you from overspending on marketing materials that target the wrong customer group.
2. Obey seasonality. In sales, seasonality does not necessarily have to follow the weather. Recognizing the seasonality of your products, however, is important. What are your peak selling periods? When are the troughs?
Ideally, a sales special or product promotion will increase your selling rate through the simple economics of elasticity. Reducing the price of a product broadens the scope of potential customers who are able to afford or choose to buy such a product. Thus, sales increase for your small business.
However, certain types of products are not elastic—meaning, a decrease in price will not automatically lead to a boost in sales. In these cases, send out a few customer surveys that ask what factors affect customers’ motivations to purchase your products.
If, for example, you sell a computer program and the largest inhibitor for purchasing it turns out to be customers’ lack of understanding about its use—as opposed to price—perhaps the sales promotion should not feature a discount on the price of the software, but rather include a free instructional guide with purchase.
3. Focus your attention. Depending on the size of your company and its product list, you may want to narrow the focus of your promotion. A bulk discount on all products is not necessarily the best course of action.
Try moving out-of-season stock by discounting winter coats in the summertime, for example. But, whatever the heaviest burden on your company, focus on that area first.
Maybe your startup clothing brand just branched into children’s garments. Snag new customers with promotions on these pieces, or create mommy-and-me clothing deals (i.e., mothers who shop at your site get free child-sized versions of their purchases).
Once you’ve increased awareness, drop off the discounting.
4. Know your online marketing tools. You can begin by offering sales specials on your business’s website. For most products, ecommerce sites are huge revenue generators these days.
Make your sales announcements pop—literally. Use popup ads in your marketing scheme. But keep in mind that antivirus software and internet browser settings often block popup ads.
If you’re not a lover of popups, incorporate hover ads. In his Entrepreneur article, Derek Gehl wrote that adding a hover ad on his website increased sales by 162 percent.1
Popup ads, hover ads, and your website’s home page are just a few of the online marketing tools at your disposal. Conduct preliminary research online to decide which e-tools will be most effective for you to reach your customer base.
5. Express urgency. Finally, what is a sales special without a limited-time offer? Sales specials that run too long will start to drain revenue, instead of adding to it.
Don’t forget to stress the urgency to buy in your sales promotion. Copywriters across America have gotten rich off the phrase, “it won’t last forever.”
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