Align with Business Goals
Before you can talk about how you’ll run promotions, you must figure out what you’ll run. Some businesses forget this first important planning step but aligning your sales and promotions with your business goals is essential to being successful.
Don’t just offer the types of promotions that you think people want to see. Instead, create promotions that accomplish something vital like an increased average order value (AOV) or repeat purchases. Starbucks is great at this concept – they offer increased rewards payouts to people who buy specific menu items (usually new releases or higher margin beverages), grant additional benefits for regular purchasers, and sometimes even reward people for buying a friend’s coffee as well.
The easiest way to fall victim to the death spiral is by running sales too often. Businesses that constantly offer deep discounts will find themselves using promotions like drugs – they’ll get addicted to that revenue bump that accompanies a sale and then have to go back time and time again to sustain that revenue.
The important thing to remember here is that the actual frequency of when your business runs promotions isn’t as important as it’s perceived frequency. Some businesses aren’t actually offering one or more sales a day, but their audience feels like they’re running sales all the time because of the incredible publicity that they pour into their promotions. When consumers perceive that a business constantly offers discounts, they’ll shift their buying behavior to wait until they see a discount that appeals to them, rather than buy when they actually want or need that business’s products/services. Then, sales become essential to maintaining revenue because your audience is waiting around until they can get a good deal and without running a promotion, you won’t get their business. That waiting period between identifying a need and making a purchase is dangerous because it provides an opportunity for your competitors to steal potential customers away.
Segmenting your customer list gives you the opportunity to target different audiences with different promotions. Again, this speaks to the idea of using promotions to achieve business goals. You can tailor different promotions to elicit different actions from certain groups. By maintaining accurate data regarding leads and existing customers, you can do things like offer a discount to people who haven’t purchased recently, or include a free gift for warm leads that have been on the fence for a long time to get them to finally pull the trigger. Remember, your promotions don’t have to be one-size-fits-all!
A lot of businesses get stuck in the “Take X% Off” or “Save $X” rut, but those popular choices aren’t the only options you have when running promotions. These days businesses need to get more creative when creating their promotions to stand out and capture consumers’ attention. I’ve seen some interesting promotions lately, such as:
- Tiered discounts off your check at a restaurant depending on the number of people in your party
- Giving back a portion of your online order total to a charity of your choice
- A free gift that pairs specifically with whichever item you purchased
- A small gift card to use for yourself when purchasing a larger gift card for someone else
- Complimentary personal shopper-type services to find a product that fits your exact needs
- Reciprocal business agreements (buy a membership here and use it elsewhere) and partner business discounts (spend $X here and get X% off at our partner store)
Whatever you decide to offer shoppers, don’t feel constrained by the typical discounts. Just ensure that your promotion isn’t too complicated to understand, remember, and use. Giving it a catchy name or an easy-to-remember promo code is a good way to boost its chances of success.
Kate Pierce is the owner of LionShark Digital Marketing LLC, a West Michigan internet marketing company. Her areas of expertise include Paid Search, Search Engine Optimization, Business Blogging and Web Copywriting. She lives in the Grand Rapids area with her husband and son and enjoys cooking, watching sports, and spending time together as a family. Like a true digital marketing expert (i.e. geek), she loves talking about current marketing trends… so don’t say you weren’t warned!