The best ways to make your sales successful
Tips on timing, pricing and marketing
We know, beyond a shadow of a doubt, that customers love sales. They love 2-for-1s, 30% offs, BOGOs and any other promotion that makes them feel like they’re getting a great deal. In fact, entire businesses have been launched solely on the backbone of the discount model (think Overstock.com, Groupon, etc.).
So, since a small business owner answers to no one and has final say on every decision, shouldn’t running a sale be as simple as slapping on a few new price tags or putting up a few 15% off signs around the store?
Not quite. As with any decision a small business owner makes, choosing to run a sale involves planning and consideration, not to mention some marketing savvy.
We’ve spoken briefly about how to best run a sale here, but below are a few more things to consider when planning a sale.
1. Sales are about timing as well as product.
A great sale hits the market at just the right moment, so that your customers can see the sale and say “That’s exactly what I’m looking for right now.” But “the right moment” might be when you’re least expecting it. For example, tons of stores run “Back to School” sales on items that they know parents will need to stock up on for their child’s school year. But a smart school-supply store might run a similar sale at the end of the school year, appealing to a parent’s sense of preparedness by discounting stockable items like pens, pencils and notebooks.
Of course, many fashion and retail brands run sales at the end of their predetermined seasons, or when they need to move merchandise to make room for new products. Small businesses generally won’t have new versions of products for every season, but many sell different products and services depending on the time of year. Cafés will sell iced coffee in the summer and pumpkin lattes in the fall, and sports stores will trade basketball sneakers for tennis rackets as the winter changes to spring. A sale on these newly in-season offerings will trigger your customers to switch their buying habits to the new season.
And finally, a word of caution. Running multiple sales in a small time-frame may hurt your image. You don’t want to be seen as the business who’s always running a new sale, because customers will become trained to wait for the next big discount before buying from you.
2. Discounts are relative.
Customers aren’t always the most logical creatures. This doesn’t mean that they’re all discount-obsessed and will come running at a “75% OFF” sale even if you’ve jacked up the original price to quadruple what it usually is. But it does mean that you can play with your pricing and make a small discount seem more enticing than it actually is. Don’t believe it? Read on.
Say you’re looking at a dress that costs $69.99. What do you think is the better deal – 40% off, or a flat price of $40? If you said the 40% off, you’re wrong by about two dollars. While the percentage off looks like the better deal, it actually just seems that way because the brain likes nice, round numbers. This piece from the Wall Street Journal explains some of the tricks that major retailers use to get shoppers to pay incrementally more for discounted items, and it’s worth a read.
The one trick that every small business owner should know about is called the 100 rule: If you’re selling something that costs less than $100, offer a percentage off, and if you’re selling something that costs more than $100, offer a dollar amount off. As mentioned before, the brain likes round numbers, and it also likes large round numbers. So if you’re selling a $4,000 service, offering $500 off sounds a lot better than a 12.5% discount.
3. How you market the sale matters.
If you’ve ever had to break bad news to someone, you know that the delivery is often the most important part. You can’t dump the whole sad story on someone at once, with no warning, and make it out to be the worst tragedy in history. You’ve got to spin it, make it so your audience will see the positive side of the issue.
So, while spin works for bad news, have you ever considered its usefulness in announcing good news? For example, if you have items that you need moved in the next week to make room for your new inventory, you could certainly create some marketing materials that advertise “50% off blue suede shoes – this week only.” That message includes exclusivity, which will help convince a consumer to buy. But if you really want to move that merchandise, you can try a more aggressive tack – “All blue suede shoes must go NOW! Huge savings up to 50% off!” This way, your customers know the urgency of the sale, and their subconscious will tell them to get there before the shoes are gone.
Again, however, you don’t want to be all big, all the time. A few major sales are great, and sometimes an aggressive marketing tactic will get products off the shelves, but understated discounts sometimes work just as well. Lining up these shallow discounts with holidays or milestones is often a good way to spark some business – things like “July 4th weekend, take $5 off every purchase” or “It’s our 10-year anniversary, so your order is 10% off.”
We hope these tips help get you on the path to running some successful sales.