How do you entice people to buy more from your store? What do you do when you want customers to make purchases more frequently, or in greater volume, or if you're looking to boost business during slow hours and more?
Whatever your goal may be as a retailer, by creating a time-sensitive sales promotion and having a good grasp on your target customer demographic, you'll be able to incentivize the right actions, get them to respond, and grow your business in the process.
In this post, we'll look at three retail sales promotion techniques that are worth their weight in gold when implemented effectively. They are:
- Promotional pricing
- Point-of-purchase displays
- Loyalty programs
So, the next time you're stuck as to how you can increase sales, get new customers, or retain existing ones, you'll have no trouble turning to the perfect promotion strategy for your goal.
Let's get started.
The Power of Promotional Pricing
As a small business owner, you already know the power of discounting products to increase demand.
But which products do you give a discount on? And by how much? Or for how long? These are all questions that come to mind when considering the option of reducing prices. They're also important questions due to the nature of how pricing affects consumer psychology.
For example, you might have heard about the power of ending prices with the number 9. Researchers have discovered that items priced at $39 sell more than the cheaper price point of $34. Or the overbearing power of the word "free," which Dr. Dan Ariely has shown to motivate us even when the perceived value and price of two options remain the same.
Now, let's take a look at a few of the more popular promotional pricing options that you can deploy in your own store:
- Markdowns: This is when you reduce prices on a wide range of products in your store for all customers. This is especially effective when backed by a wider advertising campaign, be it through paid or unpaid channels.
- Loss Leaders: When you know that certain products are in demand, regardless of whether it's a luxury item like an iPad or everyday need like under garments, you can provide certain products at a steep discount to draw new customers to your store. Known as loss leaders, these products are great for selling overstocked items, increasing traffic to your store, and generating brand awareness.
- Bundle Pricing: Bundling products is a great way to generate a higher perceived value for a lower cost that customers have a hard time staying away from. Whether it's a "buy one, get one free" deal or a "3 for the price of 1" special, this tactic is great for making customers feel that they're getting more for what they're paying. As a bonus, this is a huge draw to then entice those customers to buy higher priced items once they're in your store.
Leveraging Point-of-Purchase (POP) Displays
Though you might be most familiar with POP displays from your visit to the grocery store, where you just couldn't help but notice all those glossy magazines filled with celebrity gossip next to the point-of-sale system, you'll be pleased to know that they're one of the most effective ways for retailers to encourage impulse buying.
For example, you might have noticed that the last time you went shopping for clothes, there was a never-ending array of bins and displays filled with items that could be seen as "add-ons" or "up sells" as you make your way closer to the checkout.
The reason why these POP displays and the impulse purchases they generate are so effective is that according to research, almost 66% of all decisions to buy something are made while people are in the store shopping. And guess what? Almost 53% of those decisions are classified as impulse buying.
Well, it's time to start thinking about what you could do around your checkout area to get consumers to buy more.
Here are a few examples of different types of POP displays:
- Speed Bumps: As prospective customers get closer to the end of their purchasing journey at your store, you can intentionally draw their attention to products that they may have missed by strategically placing them along the path to checkout or even as they wander the store.
- Dump Bins: These are bins full of products once again strategically placed to elicit curiosity in consumers and get them to "dig in" and find an item that they'll add to their shopping cart as they stand in line to pay for what they came to buy.
- Free Samples: This is a surefire way to build demand for any new products that you may have recently added to your store. Giving away free samplers of certain products invites customers to use them at no cost and though they may not reach for the full-price version right away, you can be sure they'll think about it the next time they visit your store.
Getting the Most Out of Loyalty Programs
Let's face it, getting new customers costs a lot of time, money, and effort. Providing great service and creating customer loyalty programs that get customers to come back, time and time again, is far more profitable and efficient as a retailer.
Though you may not have the big-box retailer budget to launch a full-out customer loyalty program, rest assured, there are some great alternatives that also happen to be very cost effective as well.
The most beneficial of those alternatives would have to be email marketing. It's an effective way to drive customer retention and loyalty and starts as quickly as when you collect customer's email as they checkout, and then email them about exclusive sales, discounts, coupons, and other promotional offerings for a limited time period. Not only will this incentivize them to visit your store again, but it will also increase the perceived value they have of being on your email list.
One simple way to do that in your store is to use a really handy app by MailChimp called Chimpadeedoo, which you could use alongside your iPad POS system. They've also got some great in-depth case studies I suggest checking out. For example, in one case, a retailer saw their email list grow from 250 to 10,000 subscribers in just one year.
Another app you might want to check out is Belly, which helps local businesses connect with customers through a customer-facing mobile app and merchant iPad app, and helps you build loyalty by rewarding your customers each time they visit and make a purchase from your store.
Lastly, Don't Forget To Track Your Efforts
In order for you to get the most benefit from running a sales promotion campaign, you must track the percentage of sales resulting from the promotional campaign. Ideally, you should be able to assign tracking codes or discounts to certain products within your POS system and generate a report to see how well you've done since first launching the campaign.
The other important component is setting a timeline for each campaign, not just to help your customers act faster, but for you to start looking at promotions from the perspective of seasonality. That will also help you to be far more strategic and give you enough time to plan everything in advance so as to ensure you're not wasting your efforts.
P.S. If you liked this post, you'll love 9 Strategies for Profitably Pricing Your Retail Products and How to Create Retail Store Interiors That Get People To Purchase Your Products.