Are You Using the Wrong Promotions?

This issue is the fifth in my series of five articles that show you the little changes you can make to ensure more customers to your business.

This month’s article deals with how promotions can influence customers to your business. The best business promotions make it easier for your customers to buy from you; to buy more often from you; and to buy more products from you.

From the customer’s perspective, they must perceive more value from your promotion than the cost involved. From your perspective, the promotion must cost you little but add great value to the customer.

Many popular business promotions fail because their only objective is to get the customer to buy now. Creating promotions that influence the customer to buy now, buy more often and buy more products are much more effective for your business.

Let’s look at two popular promotions to see their limitations and how they can be changed to foster the goal of getting customers to buy now; to buy more often; and to buy more products or services.

Buy One Get One Free

One popular promotion is, “Buy one, get one free” You can buy a pair of shoes or a shirt and the second pair or second shirt free.

What happens when you offer a two for one promotion? If your customer is smart like most consumers, they will be very happy to buy a shirt and get a second one free. This promotion may help the customer make the initial purchase, but why wouldn’t they wait until that promotion comes again before they make another purchase? You have cut your profits in half but you have not stimulated the customer to make any additional purchases.

What if, instead of giving the second one free, you gave a related product free? Instead of giving two shirts for the price of one, you gave a free tie with the shirt? With this promotion, the customer will still need another shirt and you have only given away the smaller margin involved in the cost of the tie.

Discount Coupons

A second popular promotion is a “coupon for a percentage off of the price of the product. “ This could a coupon for $50.00 off of the first purchase at your store.

If you offer a $50.00 coupon off the first purchase, this may help some fence sitters to buy from you. But what if the customer is already going to buy from you? You have just lost $50.00 in profit?

Instead of a coupon on a product the customer is already going to buy, why not use the coupon as an incentive to buy a new product or a new version of your product. When you use the discount coupon in this fashion, you have introduced the customer to another product. Now you have more than one product the customer can purchase from you and you have not given away the farm!

An Simple Exercise

As always, here’s an exercise you can use to stretch your thinking about promotions Start from the customer’s perspective and answer these three questions.

What goes on before the customer purchases from you?

What goes on while the customer purchases from you?

What goes on after the customer purchases from you?

Answers to these three questions will give you ideas on how you can create promotions that will help the customer buy from you now; buy more often; and buy more product?

For example, when I was in the carpet business, we offered special pricing on vacuum cleaners. Vacuuming is the single biggest effort you make to maintain your carpet. This was a natural add on for the customer. But more importantly, it said to the customer, “This store is concerned about my new carpet and how to maintain it in the future!”

Conclusion

There are a variety of promotions you can use in your business. Always ask, “Is this promotion fostering more sales now; more repeat customer business and the purchase of more products from my business?”

Special Holiday Bonus

I have combined the five articles about getting more customers into your business into an e-book called, Doing the Little Things to Get More Customers to Your Business. If you would like a free copy send me an email al@hanzal.com with the subject line, “Free Holiday gift”.

Are You Using the Wrong Promotions?

No comments:

Post a Comment