Many retailers rely on different types of promotions. Because of its popularity as a marketing strategy, however, it’s become rather difficult to execute properly. For example, you may offer a good discount, but competitors can easily work their way around it and potentially create better prices and thereby steal away your customers. In fact, the Boston Consulting Group’s research found that around 20 to 50 percent of promotions generate “no noticeable lift in sales–or, worse, have a negative impact.”
That said, here are some ways to get the most out of your promotions and offers:
- Understand your target market and tailor your promotions accordingly.
- Set clear goals and metrics for your promotions.
- Use data and analytics to measure the success of your promotions.
- Make your offers relevant and valuable to your customers.
- Avoid over-promoting and creating a sense of fatigue.
- Use a mix of promotional strategies to reach different segments of your customer base.
- Continuously monitor and adjust your promotional strategies based on customer feedback and market trends.
There are generally six types of sales promotions:
- Discount: The classic promotion, wherein you lower the prices of products by a fixed or percentage amount.
- Tiered: Offer customers a larger percentage discount the more they spend (e.g., 10% off for a $100 spend and 20% off for a $200 spend, and so on).
- Private Sales: Sales that are only available to a certain segment of your customer base.
- Flash Sales: Limited-time offers and discounts for certain items.
- Free Gift with Purchase: Reward customers for purchasing a specific product or for spending above a certain amount.
- Giveaways: Let your customers obtain a chance to win high-value items by making them follow your instructions (e.g., a minimum spend, or making them follow you on social media, etc.).
When done right, promotions can provide a good set of benefits for retailers. It can attract new customers to your store or website, as exclusive deals or limited-time discounts can entice customers to try products or services for the first time. Promotions can also foster customer loyalty by rewarding repeat customers with exclusive deals or loyalty programs. This can encourage customers to continue shopping with certain retailers and increase their lifetime value.
Another benefit of promotions would be gaining the ability to clear out inventory. By offering discounts on slow-moving items, you can make room for new products and even reduce waste. Lastly, they can allow retailers to differentiate themselves from competitors by offering unique or exclusive deals – attracting customers who are looking for something special.