Do you provide special offers to people, as a way to encourage them to make a purchase? If you do, here are some things you really need to know in order to get the best results possible and avoid some common mistakes!
Special offers: Training the marketplace to wait
The first challenge with using special offers, is that if you get it wrong (and most small businesses I see do), you will be training the marketplace to wait, so they never pay the full retail on anything you offer. Here is an example, from a former client of mine.
This guy runs a seminar business and he always used special offers as part of his seminar marketing strategy. He used a newsletter for the marketing of his events and would start with an early-bird discount to encourage people to book early. These super-eager people who booked early, would have booked at the regular price anyway, they didn’t need incentives, as I later proved. Then, as the date of the seminar got closer, he always offered an x% “last minute” discount on the remaining places.
All he was actually doing, was training his best prospective clients to wait for his offers, before they booked.
Hardly anyone paid the actual price to attend one of his seminars, yet that fee was what all his planning was based on. As a direct result, he was losing an incredible, unsustainable, 40% of the profits on every event he held! By reviewing his marketing and goals, we were able to increase his profitability by over 260%, whilst offering some amazing deals – NONE of which required him lowering his seminar fees. Booking numbers and fees increased.
Special offers: The big brand approach
When big companies use special offers, we see something very different from the way most small business owners use them.
Big brands mix the timings of their offers, so they are only available when they know from extensive research, that business slows down during a certain period. They also develop their special offers, based on sound advice from their financial directors, accountants and marketing directors; so that a healthy profit is always part of the sale price. They never lose. Ever.
The discounts are usually only available for genuinely limited periods and often, only when the customer spends a certain fee (what we call a trigger fee) or buys in greater volume than usual. These are carefully planned, strategic offers.
Special offers: The all year round “sale now on”
We have all seen companies, who always seem to have some kind of sale on.
This marketing strategy is actually quite different from the use of special offers. The use of back-to-back “sale now on” messages, is typically used as a way to position a brand as a budget / value provider; because we learn to associate their brand with there being a “sale now on.”
This approach is widely used in the business to consumer market and is especially prevalent in the household goods, fast food and automotive industries.
Special offers: Make your offers work
Special offers should be used to increase your revenues and profits; not lower them.
Offering special offers is a skilled area of marketing and can sink a business, when used incorrectly. This is because they can not only lower the value of each transaction, it can also reduce the number of transactions too; as people keep on holding out for your next deal and then find a better one elsewhere. The net result can be fewer sales at lower profitability.
Here are some tips to help you get it right:
- Genuinely special. They need to have real world value. Look to add something extra, rather than lower a price. Increase the value by adding, not subtracting.
- Scarce. They are most effective when there is an element of scarcity. Offers that are only available for a limited time or where there is a limited number, work best.
- Targeted. They need to be used to gain you sales you would not have made at your usual price.
- Timed. They need to be timed in such a way, that people are not expecting to see them on a set date. Don’t train your marketplace to wait for the next offer. This hurts cash flow, lowers profits and lowers sales volume. That’s a lose, lose, lose!
I hope you found those ideas useful. Special offers are a superb marketing tool, which can produce amazing results when used correctly. Before you do your next; reader-only deal, early-bird discount, 2 for 1 offer or 20% off – Stop and think about what you want to achieve.