Most sales and marketing teams understand that, when it comes to driving revenue, discounting on price is not the only solution. At best, it should be an infrequent step or a last resort.
Currently, the big UK supermarkets are locked in a bitter price war while, in other parts of the retail sector, firms are coming under fire for running sale after sale. Ultimately, these are not the most sustainable or effective tactics and can end up eroding the value of the brand.
Smart firms, on the other hand, will understand that, during the course of a year, there are plenty of opportunities to refresh and create engaging standalone promotions or launch campaigns linked to seasonal or sporting events, for example.
The following are a few top tips for sales and marketing teams looking to create successful compelling promotions - without resorting to an all-out price war.
1. Be a good listener. Too often, sales people don’t get to grips with the challenge faced by their clients or organisations or give them the right level of consultation needed to provide a satisfactory solution. Ultimately, this is about establishing what their organisation needs to achieve – and then coming up with a strategy to make it happen.
2. Work out the right pricing mechanics. There are all kinds of promotional mechanisms that can be deployed to achieve a specific sales goal, from added-value, to conditional cash-back, trade-ups or money-back guarantees. The right strategy understands not just the business objective but also the likely consumer response. Is the brand new to the UK market? If so, guaranteed satisfaction can help win-over customers from a more established rival. Is the firm operating in a competitive environment? In this case, money-off future purchases can go a long way to incentivise customers to buy that brand again – and get them to do so within a set time period.
3. Do your homework. Before embarking on any promotion, the brand needs to be confident that the campaign will work and the assumptions being made about sales and redemptions can be backed up. Our strategy combines data and experience of similar campaigns. Rather than face what can be the disastrous fall-out from an oversubscribed promotion, we underwrite the risk of over-redemption. If a promotion turns out to be too popular, the brand incurs no additional costs or fees as all the financial risk is covered by Opia.
By Steve Gales, Sales Director at Opia.