Promotions, special offers, and discounts can be extremely effective when it comes to increasing sales, especially in the FMCG sector, but not only. In this post, we will focus on consumer promotions – how to prepare for them and how to make them effective so that your business can grow and attract more customers. Let’s get right to it!
No matter what you decide to call them, promotions are all about offering some products/services in more favorable conditions for a specific period. The goal is to drive sales, primarily during periods when given products are less popular (winter jackets in the middle of the summer) or when people are on a shopping spree (Black Friday).
For starters, let’s have a look at what your choices are when it comes to consumer promotions.
What kind of promotions can you conduct?
There are at least six different types of promotions you can offer your customers:
- Discounts: That’s the most standard form of customer promotion. It’s no rocket science – you just offer selected products for a lowered price. This typically refers to last-season products or ones that aren’t popular at the time. Some stores, sometimes referred to as “outlet stores”, offer discounted products almost all year long.
- Flash sales: They are based on offering really good discount for some products (40% and more) but only for a short period (even a few hours). Flash sales are good for large companies that already have a solid customer base.
- Bulk sales/bundles: This strategy is based on combining several of the same or complimentary products together in order to create one item that’s usually slightly cheaper than the products that were used to make it.
- Free shipping: This technique is mostly for online stores. From time to time, they offer promotions during which customers don’t pay for the delivery. An alternative to this technique is based on setting a specific threshold above which the delivery is free.
- BOGOF: This acronym stands for buy one, get one free, and it’s pretty self-explanatory. This strategy is very popular in the FMCG sector.
- Coupons and vouchers: If you don’t want to lower the prices of your products, you can offer free coupons for future shopping (for the customer or their friends) added to every order. It’s a good way of keeping customers engaged and encouraging them to place more orders at your store.
How to prepare for a promotion
A poorly-designed promotion won’t help you sell more products and can even hurt your income. In order to prevent this from happening, you need to prepare before you put this huge red banner saying “SALE” on your website or on your storefront.
Here’s what you should do:
- Do some research: You should know what products your target audience is interested in. Additionally, analyze your industry and competitors’ activities – are they running any special offers at the same time? What are these offers? How can you make your promotion more attractive? Lastly, consider how your promotion will affect other non-discounted products in your offer.
- Select products carefully: Make sure the discounted products still give you some profit margin. Otherwise, every promotion will be a source of financial loss. Moreover, decide what products are appropriate for sale given current market conditions, customers’ expectations, and even the time of the year.
- Pick the best promotion tactic: As we mentioned earlier, you can conduct six different types of promotions. Analyze their pros and cons and pick the one that matches your business and sales strategy best.
What are the benefits of customer promotions?
Companies conduct promotions to achieve four major goals:
- Increase sales: Discounted products are more attractive to customers so it is likely you will sell more of them. The AOV (average order value) will also go up.
- Loyalize customers: Here, vouchers and coupons are extremely helpful. Give your customers some vouchers, and you can be sure many of them will come back to order more products. Every special offer is also a good reason to send a newsletter or a push notification. This way, you stay in touch with customers.
- Get new customers: Discounted products frequently trigger many people to give a new brand a try. You can reach many new prospective buyers with a properly designed marketing campaign.
- Sell off older products: Some stores have to deal with the so-called dead stock issue. Older products can quickly become outdated and, hence, unattractive to customers. If you don’t get rid of them in time, you can be stuck with them. Promotions for last-season products can help you deal with this problem, at least partly.
How can you make your promotion effective?
Naturally, you want all of your customers to know about the promotion, correct? Therefore, you should do the following:
- Use all the available channels: Social media, your website, newsletters, push notifications, and even your mobile app – all these channels should communicate your new special offer.
- Make the promotion REALLY attractive: Discounting products 5% defeats the purpose in most instances. You want your customers to feel like they can save some real money on your promotion. Of course, the size of the discount depends on your profit margin, but the hard and fast rule says you shouldn’t go below 10% with the discount.
- Pick the best timing: Christmas, Black Friday, the end/beginning of the year, and summer holidays; these are times of the year when many companies sell off their products and for a reason. Make sure you pick the timing that will allow you to make the most of your offer.
- Trigger a sense of urgency: That’s what flash sales are all about. You want your customers to buy NOW, not in two weeks. To encourage fast shopping, you can put a counter on your website, counting time down to the end of the promotion.
- Engage customers: If you have a loyalty program in your store, you can invite its members to participate in your special offer. You can even give these members additional benefits/discounts not available to regular users. People like to feel special, and saying something like “We appreciate that you are part of our VIP club! That’s why we have an additional 15% discount just for you!” can work miracles.
- Create automation scenarios: You can design scenarios for each and every one promotion. This way, you can make sure each customer gets their discount and that it’s activated in the right moment.
You now know how to prepare for the special offer and how to make it effective. Now, let’s have a look at how we can help.
How iPresso can help?
That’s what our loyalty tools are for. With iPresso, you can easily implement diverse loyalty and monetization programs based on points for purchases, coupons, vouchers, and other mechanisms.
For instance, our platform comes with a comprehensive couponing module our clients use for managing loyalty programs but also for generating unique discount codes. Our couponing feature can be integrated with both brick-and-mortar and online stores so that you can engage your customers no matter what kind of business you run.
We’ve made sure that our system is intuitive and flexible so that our clients can adjust it to their needs and business profiles. Here’s how it looks: