Independent and small retail stores go through periods when daily sales receipts are down. To increase sales, attract new customers, and retain current customers, many retail stores implement various sales promotion techniques. While most business owners would love to sell products at full price all of the time, sales promotions have proven effective at increasing the overall bottom line in many retail stores. Understanding how to effectively run and track your sales promotion campaigns are essential to increasing the profits in your store.
An effective technique to increasing sales is to offer certain products at a steep discount, which are called loss leaders. The importance of loss leaders is the ability to draw new customers into your store. Most customers not only buy products that are steeply discounted, but also other products that are selling for regular price. Loss leaders are effective for selling overstocked items, increasing traffic into your store and building brand awareness. Running loss leader campaigns on a regular basis will lead to customers regarding your store as a place that always has good deals. You should inquire with the manufacturers of products you sell to ensure that offering a steep discount is an available option.
Another sales promotion technique is to offer point-of-purchase items. These items are placed on the counter near the cash register. Many retail stores place items, such as jewelry and makeup, near the register. Customers often buy point-of-purchase items on an impulse. Many retail owners believe that point-of-sale products result in an increase in revenue.
Repeat customers are essential to the success of a retail business. One method to encourage customers to return is through reward programs made available to loyal customers. A more recent phenomenon is offering coupons to customers who ‘Like’ the store’s Facebook page. This not only leads to customers coming to your store to use the coupon, but also allows you to send messages to your customers through Facebook to keep them informed on new items & sales. Another option is to send a coupon or sale notification to all of its past customers that are on the store’s email list. The incentives work well to build loyalty and repeat sales because customers have a previous history of shopping at the store are likely shop there again.
Offering free samples is a promotion method retail stores use to entice reluctant shoppers to make purchases. A free item offered in a promotion should be a low-cost, high-value item. A sample of a new perfume may be a good product to give away for some retail stores. It is important to strategically plan a free sample promotion. Some customers will purchase other items, while others will take the free sample and leave. If not executed in the proper manner, a free sample promotion campaign can cause your store to lose money.
Sales promotion campaigns must be effectively managed to receive the greatest benefit. A business owner must track the percentage of sales resulting from a promotion campaign. Assigning a tracking code to the particular items that are on sale or coupons offered to customers is one way to manage a campaign. By putting these tracking methods in place, you can return to your point-of-sale software to run reports to gauge the effectiveness of your promotions. Placing a timeline on your sales promotion encourages customers to act quickly. A deadline also allows you to analyze your data and compare it to identical time periods without promotions to determine if the promotion was successful.