Running constant promotions may have seemed like a good idea as the money was rolling in. However, you might be noticing now that constant sales and promotions are a slippery slope. It can really end up hurting your business when you can’t sustain all of the sales you’re running and it’s hurting your bottom line. You might be making money at first, but you’ll probably rarely get any regular-priced sales.
If you’re headed down this road, we suggest you turn back and break the promotion addiction. If you’ve already fallen down the slippery slope of sales and promotions, though, let’s try to help you figure out ways to get yourself out. First, we need to talk a little bit about consumers and how they shop.
With prices, products, details, and reviews so prevalent online, consumers can research everything, these days. Even if they’re walking through a store and spot a new product, with the clicks of a few buttons, consumers can see reviews, find competitors, and track pricing. So consumers of today are better informed than ever before. You have to keep this in mind as you run promotions.
It’s also important to note that consumers can look at your social media, look at content from influencers that talk about how you run sales every other week, and more. Everyone is always sharing information all the time, and so if you’re running sales and promotions frequently, word will get around, and fast! Even new customers might expect discounts going into their buying relationship with you.
The Bad Side of Training Consumers To Love… & Wait For Promotions
So, what’s the problem with teaching consumers to love promotions? After all, everyone loves a good deal, right? Well, the issue is running too many promotions teaches your consumers to wait until they can get a better price. It also might make them feel like your product isn’t worth the full price. So, therein lies two issues.
Another issue has to do with Regulatory Focus Theory, which is also called the pleasure principle. This theory plays into our motives and goals. The basic idea is people are always seeking pleasure to avoid pain. Shopping allows us to get dopamine, which can create shopaholics. It gets even worse though because when customers feel they are getting a deal, they get an even bigger hit of dopamine. Missing out on a sale is what they want to avoid–so the “pain.”
If you train users to expect discounts and promotions, and then you stop running those, they won’t be getting as much dopamine, and therefore, they won’t get as much pleasure as they once did from buying your product. Plus, if you’ve taught them to obtain your product at a certain price for quite a while, why would consumers want to pay more?
The Best Uses of Promotions & Sales
Promotions and sales can be great tools that can be used for a variety of reasons. However, use them strategically and sparingly. Here are a few ways promotions and sales can be used well. Just keep in mind that even good types of promotions can be overused and cause issues.
Promotions To Get An Email or Text Sign-up
Offering 10-15% off a first-time purchase can help you build your email list. It’s also a limited promotion that gets you information and pushes a customer to make a purchase. It can in turn help you hook them for future purchases with your marketing emails and text messages.
Screenshot from Crane Baby
Use Urgency Marketing
When you offer a small sale on an item, consider putting a product counter next to it that says something like “only 10 left!” This pushes consumers to buy when they might be on the fence. If they think you’re going to run out, they’ll make a much more abrupt decision. You can also use very short-time discounts to increase sales quickly.
Screenshot from Austin Fowler
Use Promotions For Certain Products, Not All of Your Products
Often, when consumers are shopping for something on sale, they’ll add other items to their cart. If you discount everything on your website, consumers might buy a lot, but you will probably take a loss. If you discount only certain items, consumers will be more likely to buy other products at full price. Especially if it saves them on shipping or gets them products that they can use together.
Loss Leaders Are Okay Sometimes
Loss leaders are similar to the above. Loss leaders are products that are discounted heavily, at a loss, to attract people to your store. The thought is if they are there for the heavily discounted item, they’ll buy more full-priced items while they are in-store.
Offer Special Bundles Instead of Discounts
While consumers love discounts, sometimes you can run a bundle promotion to get people to buy. It might look like an awesome deal to the consumer when in reality, it’s not much cheaper than selling the products individually. This might sound a little sneaky, but it has been a tactic used for years by many businesses.
Utilize Targeted Discounts
Did you know you can send coupon codes and discounts to certain people? You absolutely can. This is a great way to push new customers to buy when they aren’t quite sure. Very few people can avoid the siren song of a 15% off discount.
Is There Any Hope For Businesses That Are Promotion Addicted?
If you’ve run too many promotions in the past, chances are that you’re feeling it now. Most feel it by seeing their margins and profits slowly diminishing. If this is the case for your business, is there hope that you can come back from it? Yes, you can, but it may be tricky and take a lot of time. A few ways you can try to turn things around include.
- Implementing a customer loyalty program that makes customers earn discounts.
- Offering subscriptions can get you recurring revenue
- Offering bundle deals rather than sales
- Think about changing the pricing of your product if you can sustain the sale price
If you’ve trained your customers to be accustomed to sales and discounts all the time, they’ll likely be stuck in their ways, and it might take a while to see sales go back up again. You also might lose a few customers in the process. However, it’s important to break the addiction to promotions and sales when it comes to your business so it can thrive.