Getting
customers to plunk down cash or credit cards remains a painfully slow
process in this struggling economy. And that's precisely why it's
important--and always will be--to lure potential buyers with
promotions. In fact, coming up with attractive promotions has become a
bigger deal than ever.
When done correctly, promotions get
customers out of a holding pattern by giving them an incentive to take
action before a limited-time offer expires.
Here's what you need to do: | | 1. Target Your Effort
| Promotions
can spur purchases by established customers, reel in new customers,
draw customers from competitors, get current customers to buy
differently, and stimulate business during slow periods. But rarely can
one promotion accomplish all of those objectives at once. As a result,
you must decide which of the following is most important so that you
can target your effort: | | - | Do you want customers to purchase more frequently, buy in greater volume, or be attracted to new or different offerings? | - | Do you want to lure new customers into your business? | - | Do you want lapsed customers to give your business another try? | - | Do you want to boost business during slow hours, weekdays or particular seasons? |
| | After
carefully and thoughtfully defining the audience and the change you
want your promotion to inspire, ask yourself this question: If you
offer a time-limited incentive, is it likely that the customers you've
targeted will respond? If so, continue to the next step. | | 2. Plan your incentive | A well-thought-out, properly targeted promotion prompts customers to take action by offering one of these incentives: | | - | Price savings, including discounts, coupons or added value offers | - | Samples or trial offers to provide a low-risk way to try new products or services | - | Events or experiences to generate crowds, enthusiasm, sales, publicity |
| | As you decide on your incentive, keep these facts in mind:
Price offers
must be strong enough to compel, but reasonable enough to keep your
business out of red ink. Avoid uninspiring 10 to 20 percent discounts,
but also avoid very deep discounts unless they promote a loss leader to
generate other higher-margin sales, or unless they'll attract valuable
new customers into your business. Coupons
always make a comeback in penny-pincher markets, which means they're
hugely popular these days. Even young consumers and affluent
shoppers--groups that traditionally shun coupons--are using them,
boosting the typical 1 to 2 percent redemption rate by nearly 20
percent. Printed coupons are still the most widely circulated, but
printable coupons, distributed on web sites and via e-mail, provide a
terrific way to test price offers with business friends and fans before
incurring costs to promote the offer more widely via other media. Samples
work in all lines of business to let customers try before buying. The
key is to sample products that are so great they'll win raves and
repeat business. | - | Online-based
businesses need to promote free samples prominently in an effort to
attract links, visitors, site registrations and publicity. They can be
the start of a prosperous relationship with new customers. | - | Retailers
can turn sampling into promotional events. Think of Costco on weekends.
Another great example: Estée Lauder works with retailers to offer women
free mini-makeovers that end with customer photos (against an Estée
Lauder backdrop). These are then e-mailed to participants for use on
their social networking pages. | - | Service
businesses would do well to give away mini versions of their offerings.
For example, five-minute shoulder massages or one-hour home decorating
consultations. Or, for higher-ticket service businesses, samples can
take the form of affordable introductory packages that allow
prospective customers to wade into the business relationship, gaining
trust for the business while also receiving a valuable service. |
| Events
and experiences draw customers for celebrations, product launches,
special appearances or presentations, and other activities that combine
entertainment with brand and product presentations. When hosting an
event, make sure to go all out. A half-hearted, poorly attended event
is worse than no event at all, so plan, decorate, train your staff and
publicize accordingly. | | 3. Know what you want to achieve | Promotions
work especially well when consumers are in need of a jolt to take
buying action. Just be clear about what you want to achieve. Set the
number of sales you want to ring up, dollars you want to bring in,
customer names you want to collect, buying patterns you want to change,
or any other objective you want your promotion to achieve. Then
determine what your desired change will mean financially to your
business. | | By
knowing the potential bottom-line impact of your promotion, you'll have
the information you need to allocate a promotion budget, dedicate staff
time and invest the energy necessary to host a strong promotion that
will deliver business-boosting results over the time period it covers. | |
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