Here’s the deal, I love to shop. Whether it’s for myself, a family member or friend, nothing gives me that great rush of endorphins quite like shopping. But do you know what really makes shopping fun for me? A sale. Any time I get an email about a sale or special discount code to get a percentage off of my purchase, a giant smile breaks out across my face.
So here’s the dilemma for most business owners: your customers love sales, but they cost you revenue so how many coupons is too many coupons?
When your company is constantly featuring items at a discounted price or offering coupons to customers for special deals, you trap yourself. You essentially create a monster. For example, J.Crew sends me a lot of emails, most of them promoting some kind of sale or discount. They send these so often that I have become conditioned to wait until I receive an email for a coupon or discount code before buying anything. Why should I pay $79 for that sweater when I know it will either be on sale or special promotion in a week or so? See what they’ve done? They have programmed me to never buy anything at full price.
The discount trap
Short term gains in sales create long term pain. Why? Because when you stop running the constant sales and coupons, your customers won’t be happy and they won’t spend money at your store. That’s like asking a life-long smoker to quit cold turkey. It’s going to be a real struggle with a lot of setbacks.
Don’t get me wrong, your business isn’t doomed. You just need to slowly ease up on the coupons. Instead of sending a new coupon out every week, send one out every other week, then once a month, etc. Sure, some people will still be annoyed or upset, but you’ll lose less customers if you don’t cut them off abruptly. Baby steps guys.
So what do you do if you’re not in the coupon game yet, but are interested in playing? Here’s the right way to approach promoting sales and coupons to your customers:
How to do it right
Prepare for the sale beforehand – Don’t just throw together a coupon without doing your research beforehand. Check to be sure you have the inventory to meet consumer demand. Include fine print details on your coupon. Always include “while supplies last.” The worst thing you can do is promise your customers an item will be in-stock while it’s on sale, then run out.
Make sure the sale/coupon is timely – The holidays are an appropriate time to push a sale or coupon on a certain product. It makes sense. People already know they are going to be spending money around Memorial Day, Christmas, Easter, Labor Day, etc., so why not give them an extra incentive?
You don’t have to dramatically slash your prices – Just because you are running a sale doesn’t mean you have to drastically lower your prices. If you don’t feel like giving something away for free, don’t. You can still offer a coupon for $5 off your next purchase, or 10 percent off of your next purchase and customers will come.
Don’t just advertise online – Get out in the community and promote your sale. The opportunities to create a buzz around your sale are endless, you just have to take advantage of them and plan ahead. Consider a local blitz.
Observe which products are selling and which are not – What items are your customers routinely coming in and purchasing? Don’t put that item on sale. Why? Because they are continuously buying that item without it being on sale so there’s no need to push that product. Look for items that aren’t as popular. A coupon will give the consumer a push to purchase the item when they normally wouldn’t consider it.
Coupons and sales are great for bringing in business, but they are only effective in limited doses. When you constantly give away products or services at a discount, your customers will never expect to pay full price. Plus, it cheapens your brand. Remember, you don’t have to give items away for free or drastically lower your prices. Leave that to Walmart.
Want to learn more about creating great promotions? Join us for our Rock the Holidays Seminar on Thursday, November 13th, or the Webinar version of that presentation on Thursday, November 6th.