We’re bombarded with it every day. Our inboxes are full of emails from stores and websites letting us know about whatever amazing and limited-time offer they have going on that day. We turn on the TV, and watch commercial after commercial telling us about sale after sale. There’s billboards, flyers, junk mail, even people spinning signs on roadsides to try to get us to come into their store.
And you know what? We do it. We go in that store or we go on that website and we buy something that we might not necessarily have bought. Why? Because it’s on sale! We’re saving so much money!
But have you ever thought about why that product is on sale? There is a method to promotion madness, after all. Maybe there’s excess inventory that needs to be moved. Maybe it’s a new product that they want to build buzz for. Or maybe they just need to increase revenue that quarter. Either way, it’s a win-win. We get an awesome deal and they get people in their door (or on their site). A promotion is a marketing strategy. For whatever reason they need to sell that product, it’s a way to make it happen. So how can you use the same concept for your business?
Let’s say that you have recently opened a store – or, if you’re a mobile dealer, are trying to build up your customer base. Maybe sales haven’t been at the level you need. Or maybe your competitors have that product on sale. For whatever reason, you can create a promotion of your own to steer people your way.
There are a few types of promotions to consider:
- Discount – This is the most straightforward. You simply lower the price of the product for a limited time. You then advertise the lowered price through signs, emails or word of mouth (if you’re a mobile dealer).
- Multi-item discounts – This one is very common in stores. Buy one item at full price, get another at a percentage off.
- Free Goods – If customers purchase one product, they get another one for free. For instance, if customers purchase a compressor, they get an air hose for free.
- Quantity Pricing – Customers get a discount on a product if they buy a certain number of them (i.e. buy a grease gun for $20 or buy four for $15 each).
Before you go promotion-crazy, there’s a few things to consider:
- Keep an eye on your profit margin – you never want to go too low. Sure, you’ll make more sales, but you’ll lose money on them.
- Plan your promotions accordingly. No matter how good the price is, you won’t sell snow shovels in the dead heat of summer.
- Your promotion doesn’t have to be huge. Offering a free decal or hat with a purchase doesn’t cost much, and it just might help you make that sale.
- Have different types of promotions. One week, you might have a free goods offer. The next, a straight discount. Some customers prefer certain types of promotions. This ensures you have something for everyone.
- Mix it up. Don’t have all of your promotions focus on one type of product (i.e. air tools). Offer discounts on different types of products to really make your promotions work for you.
And, most importantly…
- Watch your promotions. Run some reports and see how they’re impacting sales. If one type of promotion isn’t working, try another. This is where you’ll see what works and what doesn’t, helping you to develop a foolproof plan for future sales.
With a bit of planning, promotions can become one of the most effective tools in your arsenal.