I’ve done a lot of sales promotions, and I’d be glad to share with you those that worked and those that didn’t. Let’s make our sales and marketing lives easier, shall we?
Here are tips:
· Discounts that are between 10% to 20% have lower response. From the consumers’ point of view, you aren’t really giving them that much of savings. Even though you know you’re already going to lose a significant amount of profit, your customers won’t care about that. So I would suggest…
· Have less frequent discount promos, but bigger % savings. If you’ll notice, big brands only do twice to thrice a year discount promos. But they would do 50% to 70% off! And because they are famous brands, people would come lining up for sure.
Have slow or non-moving stocks you need to dispose?
· Bundle the slow moving stocks with the bestsellers. The customer would initially pick-up the bestseller. And more often than not, they wouldn’t mind getting an extra item, either for free or only with a minimal price add-on. But be sure…
· Be sure that your customers have savings. If you bundle two items, and your pricing is just SRP 1 + SRP 2, then you’re fooling your customers. The purpose of bundling is savings and value for money. You can also do a Buy 1 Take 1.
· If you’re going to bundle, better that the two products are related. It would be weird to buy a phone, that has a free dishwashing liquid. The customers would see better value if they know they can use the two products together, or in any way related in making their lives easier.
Pricing is key.
· Use prices that end in 99 or 5. This is pretty obvious. But surprisingly, in the mind of a customer with no marketing background, this works every time. Ending your prices with 99 (i.e 199, 299, 399) gives the customer perception of savings versus prices that end with 00. (i.e 200, 300, 400). Also, prices that end in 5 works too. (i.e 195, 295, 495)
Lastly, have good timing.
· Take note of when you launch your promos. Not just because you feel like it. Do your sales promotion on a pay day weekend. Of course do it when people have the money to buy. You don’t want your customers feeling disappointed, because no matter how great your promo is, if it’s not buying season, it won’t click. Example– when it’s Back-to-School season, all money goes to enrolment and school supplies. If your product is related to this season, then by all means, do your promotion! But if not, say you’re in the spa industry and you do a “50% OFF for All Moms” sales promo, I doubt it’s going to work. Because mothers already spent their money on their children. And of course mothers would spend first for their children before thinking of treating themselves to a spa. Is it Mothers’ Day? Then that’s the perfect time!
· Limit the duration of your promotion. No promo lasts forever. Even for a year. You can’t have your products be at 50% off for 6 months! (Unless of course, there’s a need for this) Why? The objective of a sales promotion is to make your customers buy– NOW. They should buy right now, impulsively. Because this X% savings and this freebie won’t be available tomorrow. If you tell them that “Promo runs from August 13 to December 31”, I bet most of them would say “Ah, I’ll just buy next week. Next pay day. Next month.” You don’t want that. You want them to buy now, when they have the money, and when they’re in the mood. The feeling of urgency is important.
That’s it! These few tips seem easy, but it can do wonders when executed right. Have fun boosting your sales!