I’ve learned a lot about marketing over the forty years that I’ve been doing it. There have been numerous changes in how we market, including updates to marketing tools. It’s been a constant learning experience, and it takes many hours of studying to get it right for your target audience.
In this article, I will discuss some marketing ideas, explain why they were implemented, examine some failures, and provide guidance on how to handle customers who are dishonest about the deals offered.
Let’s examine ‘loss leader’
promotions. A loss leader is a product or service that is heavily discounted to
attract customers. It is typically an item that people need. During my days
working at big box stores, we would sell toilet paper as a loss leader. We
would offer deep discounts on certain brands and set maximum quantities per
purchase so no one could buy up an entire pallet.
Loss leaders work well in large
stores because customers often pick up other items while buying the deal, like
toilet paper. They can also be effective in smaller stores. A small store/business might advertise a loss leader item, but it should be touted as a gift-with-purchase to come out ahead.
When running an item as a loss
leader, tap into your buying power. Find an item that people want, but
also an item that you can buy in bulk at an incredibly low cost to you. Sometimes
that may take making a deal with a supplier. At one of my stores, I would procure
miniature tea sets as a giveaway with a purchase. Once a year, in the Spring, I
would hold that promotion, and it worked so well that people would line up
around the outside of the store before opening. I used my buying power and got
these pretty tea sets for under $2 per set!
One thing to consider is your
audience. My audience always purchased more than the promotion, and it worked
out quite well for my store. However, it doesn’t always work out for all
situations.
Case in point. A certain retailer
always did a giveaway promo in the fall. It was tradition. And because
it became tradition, they were afraid to change things up so that they wouldn’t
be on the losing end of things. As the neighborhood changed, their audience altered
too.
I had talked to them about the
promotion because I thought that my business could partner in their marketing
efforts, as we were a fit. But once I discovered what they were doing, I walked
away. They were doing a loss leader event, giving items away, with no strings
attached. The neighborhood was poor now, so guess what happened.
The morning of the promotion, the
parking lot was FULL before the doors opened. People were waiting in line at
the doors. As soon as the doors opened, the parking lot emptied just as fast.
Yup, they only came for the free items and left. Little to no shopping happened
during that promotion. I was watching this take place and was shaking my head. It
was sad. A lot of money went out the front doors, and barely any money came in.
Free is free, after all.
So, was this promotion
marketing or benevolence? It’s okay if it was benevolent, some companies do
that. Knowing your dollar limits in what you can give away and recording it
under the proper category for your taxes is important. Visit with your CPA and find
out which way works best.
How do you handle someone trying
to take advantage of a deal by cheating? If you are a small retailer, you will
need to gain some skills for this. Small retailers can’t just ‘let it go’ like
the big boxes can. Those ‘one per family’ promos, well, people always
cheat on those.
The first thing to have in place is
clear rules for the promotion. Put the rules in print on the signage and
adverts. All marketing materials and efforts should say the same thing.
I used to offer a ‘buy three,
get 4th item free’ promotion that worked very well. The rules were
that the least expensive item was the free item. This is a rule that is well
known across many retailers who offer the same. Of course, I had the rules
posted everywhere!
One day, a dear friend stopped by
to shop, and she had picked out twelve items. She was standing at the counter, sorting items into groups to get some of the more expensive ones for free.
I looked at her and explained the
rules. She would get three of the least expensive items for free out of the
twelve she picked out. She argued with me and stated that the way she had
everything laid out was how she wanted to purchase the items. She was
persistent. Obviously, she wanted the ‘friend’ wink, wink, discount.
I firmly looked at her and
stated, “When you do me this way, you are taking food out of my son’s mouth.”
He was five at the time, and she dearly adored him. She backed down and
apologized for her actions.
Some people don’t realize the
harm they are doing to retailers, and this was a great lesson for her. She now
respects the small retailer.
Yes, marketing can be a crapshoot if you don’t know what you are doing. Don’t waste your money by throwing
it out there like spaghetti against the wall to see what sticks. There is a
method to the madness, and it takes skill, knowledge, and practice. And with
the proper planning, you will have the marketing hits.
Debra Lee | Biz & Life
Coach | Author | Keynote Speaker | Blogger
Books: “It Is What It Is…But It Wasn’t A Tragedy” | “Making
Wise Choices…the most important life skill to master”
DLBizServices.com
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