Running
a promotion in-store
can be a tricky tactic. On one hand it'll attract more people to walk
through your doors. But on the other, it may
have a negative impact on your overall profits because you're
offering your products at a lower price!
So
how do you find that sweet balance?
Take
a look at this post to find out how you can run in-store promotions
without
killing your profits...
Define
your margins – set your campaign goals
First
step is to map out your overall campaign goals. Once you set an
acceptable margin range for your products, you'll be able to
determine the type of promotion you can run.
-
Are
you looking to attract new customers?
-
Do
you want customers to shop with you more frequently?
-
Do
you want to push a new product?
Depending
on what your overall goal is, will depend on how far you should go
with your discounts. For example, if you're trying to attract a new
audience then it may be worth offering a bigger and more enticing
discount than say 10% off, in the hope that they will become a
lifelong customer and spend more with you over time.
And
sure you may want to achieve all of the above goals, but it's
important not to focus your efforts on everything at once. Segment
your audiences to run targeted campaigns. That way you'll have better
transparency for your promotion and your goal will be clear from the
off-set.
Think
creatively
Running
a promotion doesn’t always mean that you have to run a super
impressive coupon deal that offers loads of discount, and leaves you
with barely any profit. There are some promotions out there that look
like great deals, but will actually encourage people to spend more
with you.
Some
of our favorite promotions that won't harm your profits include:
Loyalty
points:
This
is a great promotion to encourage people to keep shopping with you.
You can create a loyalty store card so that once customers have
shopped with you a set number of times, they'll receive something for
their loyalty. This could be a discount or even a free gift that
won't eat into your margins.
A
flash sale
A
flash sale is a smart choice to make because it's limited to specific
time, meaning it'll encourage more people to walk through your doors.
Retailers often use this type of promotion when they need to shift
old stock. The limited time period creates a sense of urgency, and
while you're running the flash sale you can highlight full priced
products that may incentivise customers to spend more.
Spend
over x amount and get x off
This
type of promotion works similar to a loyalty card, but encourages
customers to spend a large amount all in one go, so that they get a
discount. For example, if customers spend over $100, then you'll give
them 10% off (or whatever you can afford to do depending on your
margins).
Execute
at the right time
We
talked above about trying not to tackle every promotion at once
because it can be damaging to profits. But one of the biggest
problems that we see so often is a store running a promotion every
other week.
You
can probably picture the culprits in your head, and the problem with
doing this is that customers start to lose faith in the brand.
Customers learn to wait for the sale, because they know that they
happen so frequently - after all - why would you pay full price if
you know that you can pay less a week later?
When
it comes to your promotions, don't run a sale every week and make
sure you execute your promotions at the right time. Waiting for the
holiday's is perfect because this is when shoppers are most likely to
come in store and spend money with you.
Up-sell
at the cash register
Sure
the customers in your store may have been enticed to come in because
you're holding a sale, but that doesn’t mean they have to leave
with just discounted items.
Implement
an up-selling strategy so that every time a customer buys something,
they are offered an additional product to buy at the cash register.
To make it more likely that they will buy, train your employees so
that they have the knowledge to offer expert advice on all of your
products. That way, they can offer great advice and suggest
additional products that the customer could need to go alongside the
one that they are already buying.
And
to incentivise employees to do this you could even offer commission
on every transaction that they manage to up-sell.
Bonus
tip: Let customers try before they buy
Another
great way to encourage more customers is to incentivise people to buy
your products by throwing in a freebie. Say for example you're trying
to push your latest perfume or makeup range. Well, give customers a
taster so they can test if the product is right for them.
A
'try before you buy' promotion is perfect when you're trying to push
a new product. It won't have any real impact on your budget, yet
it'll raise awareness of the product and encourage people to part
with their hard earned dollars!
Takeaway
Running
various promotions can bring in plenty more people to your store, and
if you're smart about it, you can encourage customers to spend more
while shopping with you. A promotion doesn’t always have to eat
into your profits – set your campaign goals and choose the right
promotion for you.