Every promotion needs to have a goal. Of course, its natural to think that “SALES” are always the promotional goals. But savvy small businesses know that every promotion drives a specific behavior. Promotional goals can increase the dollars per transaction, increase store traffic or drive add on sales. The target market may be current customers or lapsed customers.
Think about the rhythm of your customers to select the best timing to align with a natural behavior. For example, August and September back-to-school shopping could align to both consumer and business targets. Both consumer shoppers and education-focused business customers stock up for the fall. In December, businesses with excess budgets may be open to making a large purchase. Or, businesses with tight budgets may jump at a special offer where a December purchase is invoiced in January.
Think about your business and its natural rhythm. At your highest volume months, it may not make sense to offer a price discount. If there is high demand, consider a promotion where a portion of the sales are donated to charity without price discounting. Conversely, during low volume months, a “friends and family” rate may spur traffic.
One kind of Promotional Goal is acquiring new customers through a Trial offer. A trial offer is typically a very low price on the first purchase of an item. (A “limit one” offer.) Often loss-leaders, these trial or traffic offers can be at or below cost. To be profitable, it is important the first-time customer returns after their initial transaction.
A second Promotional Goal is Repeat Purchase Offers. A discounted price if customers return within a specific time is common. These “bounce back”offers are usually printed on a receipt or delivered in an email after an initial purchase. A “welcome” email with an discount offer to return is a standard practice.
A third Promotional Goal is a Retaining Offer. Examples include accepting a competitor’s coupon, or price matching a competitor to prevent your current shoppers from visiting a competitor.
Another Promotional Goal is building the dollars or units per transaction. Success is dependent on cross-selling and upselling to your current customer base. Offers include a volume break when the customer purchases a minimum quantity that is higher than average (“ an offer that is “2 for $30 or 3 for $40”, for example.) Or offering a price break on an ancillary item (“free ream of paper when you purchase $50 or more.”) For more, see “The Math Behind Multiple Unit Promotions.”
A final Promotional Goal is rewarding key customers. A customer analysis of total dollars per customer over the past two years should help you arrive at a concise list of your best customers. Consider offering those elite customers a special offer that is a reward for their status. Offers can include a special gift with purchase, exclusive events or a special discount. You can even offer their choice: the gift or an event or a discount. Remember that great customers tend to know other great customers, so be sure to create exclusive offers that your best customers can share to their friends. One of the most effective untapped marketing channels retailers have is the recommendation of their best customers.
After creating the promotional goals and offers, consider all the available marketing channels available to notify your potential and current customer base. Use in-store signs and posters, associate buttons, ceiling danglers, receipt messages, direct mail, email, social media, newsletters, newspapers, networking meetings – any place where you can amplify your message to potential customers. As you look at these “channels,” list them along the left side of a spreadsheet. Consider the timeline involved in creating the message. Newspapers, traditional media and direct mail campaigns need weeks or months of advance notice. In-store pieces can take weeks to create. Social media posts and emails are created in minutes to hours. Evaluate which elements you can delegate to a store associate or an outside resource.
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