Strategies, Retail Sales Techniques & Promotion
Court customers who can pay full price. The temptation is to chase the cheapskates – don’t do it. You are buying their loyalty with your own lost profits. Yes you can buy closeouts and last year’s items but there’s a reason they are cheap – low demand. Stores exist to answer shoppers’ one question, “What’s new?” Good customers will pay for that. When you give care to what you buy for your store – once you really understand who your customers are – they will buy from you.
Attract new customers with great windows, a great website, a blog and social media. The logical step when you want to go after full-price customers is to give them a consistently high-quality experience. That means killer window displays that tempt desire with one grouping, rather than trying to hardsell everything in-store. That means paying for a website that mirrors a high-quality experience with your hours, directions and what customers will get from coming to your shop. It means a blog that continues to help your customers do more with the items you carry. And it means a compelling social media strategy that includes Facebook, Instagram, YouTube and the rest.
Pay more to your employees. There’s a reason many small businesses stay small – they think small and try to limit every cost. When you pay employees more, you can expect more. Stores that pay higher wages with more full-timers have lower turnover and higher profitability. You have to see the hidden costs behind everything. Never compromise your store’s ability to create an exceptional experience for your customer due to hiring who will work for the lowest wages.You are known for your compromises more than your successes in business.
Train Better. The siren song for many retailers is hiring competitors’ former employees because they’re already trained. I would challenge you that they are trained – probably on the job with little followup – to work in that other store. That means they have a “right” way to do something – whether it’s your way or not. That means you inherit a system often at odds with your own. Take nothing for granted when it comes to how your employees answer the phone, greet a customer, sell your merchandise – even take out the trash. Retail sales training is a must.
Curate the best stock. More lines, more models, more choice is not what customers are looking for. Your customers are looking for the best choice. That means you want to be a curator that organizes and presents a collection of products customers can clearly see have advantages over the competitors.
Engage the customer. Notice I didn’t say greet the customer. Merchants who station a greeter at the front of the store to parrot, Hi, how are you today? are not engaging, they’re annoying. The best retailers, the ones who hire and train better, know the game is to engage the customer in a conversation. That doesn’t mean to badger them with 100 questions or direct the customer to a kiosk but to encourage employees to find a way to engage the customer in a back-and-forth dialogue. To be helpful. To be handy. To be human.
Invite them back. The last thing your customers will take with them is how you sent them back into their own world. Thank you is fine but the best stores find a way to come around the counter, thank the customer again for their purchase and invite them to return. Friendly, engaged and memorable.
7 Techniques used for Sales Promotion
Technique # 1. Price Promotions:
Price promotion is also commonly known as price discounting’. This offers either a discount on the normal selling price of a product, or more of the product at the normal price. Increased sales gained from price promotions are at the expense of a loss in profit, so they must be used with care.
A producer must also guard against the possible negative effects of discounting on a brand’s reputation, e.g. price discounts offered by companies as an end-of- season sale or festival sale.
Technique # 2. Coupons:
Coupons are another, very versatile way of offering a discount. Consider the following examples of the use of coupons: on a pack to encourage repeat purchase, coupons sent out with newspapers which can be redeemed at retail outlets, a cut-out coupon as part of an advertisement and on the back of bill receipts.
The key objective with a coupon promotion is to maximize the redemption rate—this is the proportion of customers actually using the coupon. One drawback with coupons is that they may simply encourage customers to buy what they would have bought anyway. Another problem occurs when retailers do not hold sufficient stocks of the promoted product, causing customer disappointment.
Use of coupon promotions is, therefore, often best for new products or perhaps to encourage the sale of existing products that are slowing down. For example Pantaloons offers a green card for people who shop above a certain limit. This card gets customers special discounts, free passes to shows, and so on.
Technique # 3. Gift with Purchase:
The ‘gift with purchase’ scheme is also known as premium promotion, in that the customer gets something in addition to the main purchase. It is widely used for subscription-based products (like magazines), consumer luxuries, (like perfumes), and so on. Everyday examples are newspapers and magazines giving gifts to people who subscribe for a period of time.
Technique # 4. Competitions and Prizes:
This is another popular promotion tool with many variants, most competition and prize promotions are subject to legal restrictions. Lucky draws, for instance, are common in the Indian market.
Technique # 5. Money Refunds:
Here a customer receives a money refund after submitting a proof of purchase to the manufacturer. These schemes are often viewed with some suspicion by customers, particularly if the method of obtaining the refund looks unusual or onerous.
Technique # 6. Frequent User/Loyalty Incentives:
Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples are the many frequent flyer or user schemes offered by airlines and car hire companies.
Technique # 7. Point-of-Sale Displays:
Research into customer buying behaviour in retail stores suggests that a significant proportion of purchases results from promotions that customers see in the store. Attractive, informative and well-positioned point-of-sale displays are, therefore, an important part of the retail sales promotional activity. For instance, Maggi and Cadbury’s have special stalls installed for their products in supermarkets.
Top 6 Techniques of Sales Promotion Techniques
(i) Advertising Support Programs:
Sometimes marketers with the offering of promotional support in the shape of physical displays, also offer financial assistance to their retail chain partners in the form of payment of their advertisement bills. These finances are usually directed to retailers who then incorporate the company’s products in their advertisement media.
In extreme cases, the marketer offers pay the whole cost of advertisement campaign but generally the retailer pays the partial payment, which in the world of retailing is known as co-op advertising funds.
(ii) POP (Point-of-Purchase) Displays:
POP displays have become integral part of modem retailing. They help reinforce the store/product image, enhance retail sales through floor communication and provide information to the customer. POP actually is particularly designed materials planned for placement in retail outlets.
These displays permit products to be significantly presented, usually in high traffic areas of the retail stores, and thereby raise the likelihood that the product will be noticeable. These displays come in many shapes, though the most popular are those allowing a product to stand alone, such as placed in between a store walkway or sit at the end of a walkway, where it will be exposed to intense customer traffic.
The main function of POP in a retail store is to enhance sales. It has been found that for the retail channel partners these displays can result in considerable sales increase as compared to sales levels in a normal shelf position of a retail store.
(iii) Short-term Trade Allowances:
These allowances are offered to those retail channel partners who agreed to stock the product. Generally these allowances are not only given so that channel members should stock marketer’s products but to induce them to promote the products in different ways like offering some attractive shelf space within the store. Sometimes, these allowances may be in the form of price reductions or guarantee to buy back the products if these are not sold in certain period of time.
(iv) Retail Sales Incentives/ Push Money:
Here sales promotion offers are subject to induce efforts that lead to meet store’s promotional objectives, it makes common sense that these should also be applied to those people who actually participate in increasing the sales. These are the persons who help the store in making their dreams come true.
Thus retail stores from time to time offer some retail incentives in the form of monetary or non-monetary incentives to those who affect sales. These people are the sales executives or floor employees who directly interact with the customers and sell the goods. Sometimes these incentives are called ‘push money’ as these offer employees cash or prizes, such as foreign trips to those who meet sales requirements.
(v) Promotional Products:
This is among the commonly used methods of sales promotion. This is the way by which company with some purchase of goods, gives some reminders with the company name or stamp which serve as reminders of the actual product. For example, companies often hand out free diaries, calendars, coffee mugs, pens, paper weights, decorative pieces or wall clocks.
(vi) Trade Shows:
This is also the common form of promoting retail sales. This includes industry trade show (exhibitions, conferences and conventions). The purpose of organizing trade shows is to bring both industry buyers and sellers together at one platform. Spending money on trade shows is one of the topmost of all sales promotion drives. In fact, FICCI estimates that over Rs. 500 crore is spent annually by marketers to participate in trade shows, exhibitions and conventions.
Marketers are attracted to trade shows since these offer the opportunity to reach a large number of potential buyers in one convenient setting. At these events most sellers attempt to capture the attention of buyers by setting up a display area to present their product offerings and meet with potential customers. These displays can range from a single table covering a small area to erecting specially built display booths that dominate the trade show floor.