Promotion Strategies to Crank Up Sales in a Slow Economy
In a time with so much economic uncertainly, consumers are on the hunt for bargains. And consumers aren't the only ones tightening up their belts; businesses large and small are scrutinizing purchases more than ever.
Whether your company sells to consumers or business, creative promotion strategies can give sales a much-needed boost to revenues in a difficult economy. To generate ideas, take a look at the big retailers. While the economy is slow, the big box stores are pulling out all the stops to bring customers in the door (and to their websites).
Following is a list of promotion strategies from the real world. Use these to inspire ideas for generating creative promotions for your business. Though many of these are used in retail sales, they can easily be replicated for all kinds of businesses.
Gift with Purchase
One local furniture store frequently gives away substantial gifts with purchase. For example, buy a bedroom set and get a flat screen T.V. or a gas barbecue. The cost of the bonus item can be subsidized by partnering with the maker of the give-away (they offer it at cost in exchange for publicity).
Many retailers are trimming prices across the board and using the opportunity to advertise: "Check out our new lower prices!" You can bet that they will raise prices again later when the economy begins its recovery, but in the meantime, it gives them an edge over their competition.
A New Spin on the BOGO Offer
The Buy One, Get One offer is a perennial favorite and one retailer found a way to inspire higher-dollar purchases. At the time of this writing, Costco is selling five $20 Starbucks gift cards (a $100 value) for $80. Since coffee is a luxury item that can be sacrificed when consumers tighten up their budgets, offering a discount provides a boost to both Costco and Starbucks.
Deep Discounts on Clearance Items
Instead of the typical 20 percent to 40 percent discount on end-of-season merchandise, sales racks at stores are boasting discounts as high as 75 percent. Some even offer an extra 10 percent off if you use, or apply for, a store credit card. What retailers lose in deeper discounts they make up for in sales volume.
Many businesses offer special discounts to groups such as seniors, teachers, students, corporations, members of trade associations and non-profits. Whether offering a percentage off on a certain day of the week or year-round, this strategy can provide a great incentive for buyers. As an added bonus, organizations that receive these discounts will often promote the offer to their members.
A loss-leader is a deep discount on a product sold below cost (at a loss) in order to get people in the door (so they will spend money on other purchases). Grocery stores are famous for offering popular items like soda at ridiculously low prices. Recently, the California Lottery held a promotion that caused a traffic jam in one Northern California city. When customers purchased $10 in lottery tickets, they received $50 in gasoline. Not only did this promotion prompt a huge spike in lotto sales, it was so popular that it ended up getting air time on the evening news.
Discounted Gift Certificates
Retailers love gift certificates because they generate cash flow and a high percentage of them never get redeemed. One local hair salon sold gift cards valued at $50 for just $25 and marketed them to the business community. They sold dozens of cards to business owners and sales people who gave them away as gifts for their clients. As a result, the majority of the cards were distributed to potential new clients.
Gift Certificates with a Bonus
A popular holiday promotion that many restaurants and retailers employ is to offer a bonus with gift certificate purchase. For example, for every $50 in gift certificates purchased, get a special $10 gift card. Typically the bonus is valid only in the following month, giving the buyer incentive to return and make yet another purchase.
To get new customers in the door, one local computer shop offers complimentary health check-ups on computers. While customers wait, they have the opportunity to shop for add-on products and services. In a similar promotion, a local pool company offers six months of pool cleaning services with any new pool installation. After servicing the pools for several months, the company will likely land contracts for continued pool maintenance services from satisfied clients, thus trumping the competition.
Smart retailers collect e-mail addresses and send out regular promotions to subscribers. For example, save 25 percent when you shop online before Friday!
Events: Register with a Friend
A great way to fill seats at events is to offer a discount when you purchase two tickets. For example, if registration costs $100 each, sell two for $150.
Remember, the point here is to find creative new ways to promote your products and services. In a difficult economy, price becomes an important factor when making purchasing decisions. In order to thrive in a marketplace that is becoming increasingly competitive, we must all learn to think outside the box to keep the sales wheels turning.
About the Author:
Stephanie Chandler is the author of several business and marketing books including FROM ENTREPRENEUR TO INFOPRENEUR: MAKE MONEY WITH BOOKS, E-BOOKS AND INFORMATION PRODUCTS. Discover hundreds of resources for entrepreneurs at www.BusinessInfoGuide.com. For author and speaker details visit www.StephanieChandler.com.