Archives for January 2011

COMPETITION IS ALL ABOUT ME, ME, ME

As a parent, I tried to instill in my sons an awareness that the world did not revolve around them. Always think of others, be generous and sharing, and so on; often foreign concepts to a child.

As a father of college students, I preached less charitable concepts. The unfettered application of the same Robert Fulghum-ish principles that taught them to share their toys and wait their turn in line foretells disaster in a world where over 80% of businesses fail before their fifth anniversary.

We live in an Internet crazed universe where potential customers are nanoseconds away from a myriad of rival goods and services. Our zero-sum business world demands you think of yourself. Why for example would a customer rather deal with you than someone across town or even across the globe? This harsh reality can be summarized in one word, competition!

There’s nothing original about the suggestion that competition is by its very nature selfish. Adam Smith explained his concept of the “invisible hand” in The Wealth of Nations in 1776. He said, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”

Today’s vernacular is “what’s your value proposition.” In Creating and Delivering Your Value Proposition: Managing Customer Experience for Profit authors Barnes, Blake and Pinder offer this definition. “A value proposition is an analysis and quantified review of the benefits, costs and value that an organization can deliver to customers and other constituent groups within and outside of the organization.”

In other words, what is it you do better, faster, cheaper, etc. than your competition? How you define, manage and exploit those advantages at a profit is perhaps the most fundamental strategic decision facing every entrepreneur. Businesses define their value proposition within the context of three attributes. They are product, service and price.

These attributes are multi-faceted and occasionally overlapping. A business can actually compete on any two, but never on all three. It is simply not possible to profitably offer the best products, supported by the highest level of service at the lowest prices.

Product competition can involve offering the highest quality, the widest selection, or both. The Neiman Marcus catalog includes 15 men’s designer watch manufacturers including Cartier and Gucci. Timex watches may keep on ticking but they won’t be ticking at Neimans any time soon. Quality can be inherent in the product or exist largely as a perception of the buyer. Car manufacturers have know this for years. Is a Lexus really worth $10,000 more than a comparably equipped Toyota? To the image conscious consumer, the answer is obviously yes.

Service can take many forms and be at point of sale, after the sale or both. L.L.Bean, ranked highest in customer service by Business Week in 2008, pioneered the “lifetime satisfaction guarantee” almost 100 years ago. Visitors to Freeport, Maine are regaled with stories like the fisherman who stopped by at 2:00 A.M. (being open 24 hours is also an important aspect of their value proposition) to return boots purchased years earlier, no questions asked!

Contrast that to the experience of trying to find a sales assistant at the typical “big box” store. Competitive service advantages can encompass product ordering terms, gift wrapping, free Wi-Fi, delivery and even a friendly smile. Features such as free shipping, financing and money back guarantees can blur the line between service and price.

A textbook example of a business that competes on price is Sam’s Club. In the past five years, I’ve spent 50% more at Sam’s than a high-end grocery store two blocks from my house. I’ve purchased groceries, printers, digital cameras, gasoline, office supplies, pet food, toys, books, clothes and car tires. One day a guy actually talked me into whitening my teeth. Why do I prefer Sam’s over the closer store? The former operates like a giant warehouse bereft of employees and shopping bags, while the latter walks half-full grocery bags to my car as I sip lattes from their espresso bar. I buy undifferentiated products not requiring service from an array of acceptable if ever changing manufacturers, but always at Sam’s consistently low prices. I find value in that assurance. I can also make my own lattes.

A final caution to those relying on pricing as their primary strategy. It’s getting harder to make a buck in your increasingly crowded world. Watch TV commercials and ask yourself which of the three types of competition is promoted most often. In a stagnant economy with 15 million unemployed, it is tempting to lure customers solely on low prices. Prices are objective and quantifiable. Product and service are more subjective and far less reliable a basis on which to make rational consumer decisions. The problem is if someone patronizes a business only because of low prices, they tend not to develop customer loyalty. Many retailers are capitalizing on this tendency by providing in-store price comparisons, often matching the lowest advertised price. In an age of instant information where any consumer with a Smartphone can check competitors’ prices on the spot, there is no reason to assume this trend will not continue, or that consumer behavior will change.

After all, when I was teaching my sons to share I would have gently corrected them with a not-so-invisible hand if I caught them sharing Daddy’s hard-earned cash with corporate America.

Did I get it right, Mr. Smith?

Maximize the Marketing Value of Your Work Force

Many companies like to parrot the phrase “our employees are our greatest asset.” Far fewer seem to actually believe their own press. Yet in most businesses sales and customer service staff are in the best position to favorably influence customer perceptions, identify new opportunities and resolve issues.

I once made a strategic marketing suggestion to a struggling client. The CEO was sufficiently impressed to write a recommendation that said in part, “CFO America was quite helpful in directing us in some marketing improvements that we could make. We are now in the process of implementing changes that are destined to enhance our financial picture.” The suggestion was developed from an employee’s comment. Since no one had ever asked for her opinion before I interviewed her, she never volunteered it. This sort of firsthand market intelligence is a valuable asset; it is up to you to capitalize on it.

  • Constantly challenge and encourage employees to identify marketing opportunities. Maintain an open and direct line of communication through brief but regular staff meetings. Actively solicit their input and try to implement at least one idea every month. Publicly reward accepted suggestions in ways employees value. That may mean an employee of the month plaque in the lobby or a $250 AMEX gift card. If you can spare the manpower, a floating holiday is always appreciated. Again, don’t be afraid to experiment.
  • Don’t assume every employee knows all they need to know about your products, services, company policies or even the basics of sales and customer service. Make sure they are adequately trained. Simply teaching them to always ask the equivalent of the fast food industry’s standard question “Do you want fries with that order” might go a long way toward increasing average customer purchases.
  • Offer substantial discounts to employees. While it will not generate significant sales or profits, it will generate goodwill and encourages employees to use and demonstrate your products in front of customers.
  • Tie incentive compensation to the specific employee behavior that will accomplish your marketing goals. A former employer once ran a promotion offering bonuses for all sales increases. The problem was they lost money on some products, primarily because they were already underpriced. When sales of the loss leaders increased, the added cost of bonuses produced a “double whammy” on their bottom line. Do you see why I keep stressing the importance of knowing your numbers? If your goal is to increase high margin sales, offer bonuses only on high margin products. If the goal is to increase the average sale per customer, offer incentives only for sales above a predetermined minimum. It will be more difficult to administer an employee incentive program like this, but the bottom line impact will be worth it.

Reduced risk equals increased sales – Part 2

Last week, I discussed how customers’ natural aversion to risk can cost you sales. Removing real or perceived risk is essential in many types of businesses. Here are two more ways to overcome this aversion:

  • Customer risk perceptions include concerns that your product or service might not perform as promised. To overcome this concern, and to be truly distinctive, customer service must include clearly defined after sale policies and procedures. L.L.Bean, who Business Week named #1 in customer service for 2008, pioneered the “lifetime satisfactionguarantee” 100 years ago. Sears has offered a similar lifetime warranty on the popular Craftsman tool line since its introduction in 1927. Over 80 years later, a spokesman said, “Our Craftsman Hand Tool Lifetime Warranty is one of the most important competitive advantages we have in the market.” Will some customers take advantage of this generous policy? Without question. But occasionally dealing with unhappy and unreasonable customers is a cost of doing business. While a lifetime “no questions asked” policy is probably not necessary, the nature of your product or service and the terms offered by competitors may require a policy that offers repairs, refunds or store credit for a reasonable period of time. Once again, accountability is a key element of success. You must be able to track the cost of returns and refunds, and have at least an intuitive gauge of the impact on customer satisfaction.
  • Customer risk perceptions also include the fear that you may simply not show up on time. We’ve all wasted time or had plans ruined while waiting for the promised service call or delivery that never happened. Arguably the best way to overcome this concern is through a solid reputation of on-time service. A quicker way may be to offer a guarantee. For example, there is a national franchise of HVAC contractors whose advertising slogan is “Always on time or you don’t pay a dime.” Aside from the cost of providing free service to already angry customers, this sort of guarantee may have other unintended consequences. Domino’s Pizza was forced to discontinue its 30 minute guarantee in 1993 due to the number of lawsuits arising from accidents caused by hurried delivery drivers.

In most businesses sales and customer service staff are in the best position to favorably influence customer perceptions, identify new opportunities and resolve issues. On Friday, I’ll discuss how to put the old phrase “our employees are our greatest asset” into actual practice.

Reduced risk equals increased sales

A basic human characteristic has the potential to influence any sale. Customers are adverse to risk! Remove the risk (real or perceived) of doing business with you, and your closing rates will soar. Customers obviously want to be assured that you will deliver the promised goods or services. They also want to know how much they should expect to spend in advance without having to keep an anxious eye on the clock. This is often an issue for lawyers, CPAs and other highly compensated professionals who generally charge hourly rates. These uncertainties equal risk. There are several ways to overcome this aversion. Here are two:

  • Structure an introductory offer. For example, as an attorney with a billing rate of $250 per hour, offer to incorporate a new business, obtain all required permits and tax identification numbers and organize the corporate records for $499 including an initial one hour consultation. If the project can be completed in 2 hours or less, you earned your expected rate. If not, the introductory offer still works if you provide subsequent services on a regular basis. As you complete assignments you can find ways to reduce time and costs, lowering your “break even” hours in the process.
  • A second alternative is to just break whatever pricing mold exists in your business and pull ahead of the pack! A simple but timely example is the U.S. Postal Service’s priority shipping program. Using the slogan, “If it fits, it ships” they charge by package size while the competition charges by weight. If your competitors charge by the hour, offer fixed fees. If they require an annual contract, offer month-to-month services. This may be especially effective while initially establishing a revenue base to cover fixed costs (there’s that “understanding your numbers” thing again). There is probably no law that says you must bill clients like everyone else does, nor are you locked into the same pricing methodology after your business is established. In the meantime, you will learn efficiencies and improve your estimating skills, adjusting your prices accordingly. You can also re-price services as necessary in subsequent years, as long as you don’t give the appearance of discriminating against returning customers in favor of new ones.

Why not reach out and touch someone?

The Internet, email and text messaging all became popular within the last 20 years. Earliest examples of written language date to the Bronze Age, around 3000 B.C. No one really knows when people first started talking with each other. In a world where it may now be theoretically possible to live your entire life without ever uttering a word or holding a pen, it is easy to forget that communication includes non-electronic medium. I will say again that effective business communication means conveying your message confidently, concisely and consistently; it is not restricted to any specific medium. Creating a balance between Internet based communications and more traditional methods can be a distinct competitive advantage. Some examples follow.

  • Magnetic signs on company vehicles are inexpensive rolling billboards seen by hundreds of potential customers every day in the neighborhoods and areas where your products or services are purchased. Custom signscan be purchased online, at FedEx Office or numerous franchise operations like Sign-A-Rama for under $100 per pair.
  • Any successful company or organization must be able to “speak the same language” as their customer. That phrase has both a figurative and increasingly a literal meaning. In 2000, the U.S. Census Bureau estimated 47 million Americans (18% of the population) spoke a language other than English at home. That compared to 23 million in 1980. According to 2009 Census Bureau statistics, 35 million Americans over the age of 5 speak Spanish as their primary language at home. Only half considered themselves able to speak English very well. California, Texas, Florida and New York reported a combined Hispanic population of 27 million people, with nine other states having populations in excess of 500 thousand. The social impact of these statistics is profound. You must decide their marketing significance. Regardless of the nature and location of your market, the ability to communicate across a broad demographic spectrum can only increase your potential customer base. Perform a cost-benefit analysis of bilingual resources including your staff, marketing material and company forms such as contracts, invoices and statements.
  • It is easy to follow up meetings and customer interactions with email. It is even easier to delete email without reading it. The problem is magnified if you use a URL that the recipient does not recognize. A hand written note mailed with a U.S. postage stamp or a phone call can get your message across without breaking the bank. Even if a customer initially contacted you through email, they may find your reply more engaging if you simply pick up the phone.
  • Speaking of telephones, many customers will refuse to leave a voice mail message. There is nothing you can do to change their behavior. For those who will, provide basic information on your out-going message including business hours and an emergency contact if appropriate. Let the customer decide how to get in touch with you. They may feel more comfortable with alternative forms of communication such as your website, email or fax. Having phones answered by a human being during business hours (as opposed to “press 1 for Mary or 2 for Steve”) costs little and adds a level of personal service probably lacking in many of your competitors.
  • You communicate with customers and prospects every time they are reminded of your company or products. An obvious example is your phone number. Who can forget 1-800-Flowers? Even more subtle are vanity or personalized vehicle license plates. The¬†American Association of Motor Vehicle Administrators estimated 9.7 million Americans had personalized license plates in 2007. While there is no report of how many were on commercial vehicles, if you can communicate your name or message in 7 characters or less, give it a try.

About Being a Good Corporate Citizen

Today, more than any time in recent memory, there are countless deserving charities and community groups that will benefit greatly from any support or assistance your business can provide. Since these organizations are often managed by local business leaders and prominent members of the community, your involvement will communicate your message to a wide audience with attractive demographics. Keep in mind that if your primary motive is merely a selfish desire to profit at the expense of a charity it will cause far more harm than good, as it should.

Charitable support does not have to mean cash out of your pocket. It also includes allowing groups to post notices of upcoming fund raisers in your front window or selling cookies on your sidewalk. As an antique car owner, most shows I attend are charity fund raisers sponsored by local restaurants. Their support does not go unnoticed, especially when car enthusiasts fill restaurant parking lots to over-flowing on a slow Sunday afternoon. I discovered my favorite BBQ restaurant while attending a car show and won a “Top 20” award in the bargain.

Consider the following suggestions:

  • Volunteer at organizations that serve your target market. For example, a youth league is a natural fit for a sporting goods store. Look for roles that offer maximum exposure to members. Manning the sign-in desk or being a greeter is not glamorous, but they are great places to meet people. Any role that allows you to demonstrate your skill and expertise is valuable.
  • Offer your product or service to local charities. A cleaning service we know offers free house cleaning to cancer patients. You can stretch your generosity and reach a wider audience by having the charity supply the labor while you supply the technical knowledge, supplies and so on. But be careful! It is fine to have a volunteer operate a vacuum cleaner; don’t let them near expensive or dangerous equipment.
  • Donating gift certificates or baskets filled with your products to charity auctions is a great way to increase visibility within your community. Come to think of it, what’s to stop you from supporting charities in neighboring communities?
  • Adopt a street, sponsor food drives, clothing collections and so on. I was recently invited to a seminar held 10 days before Thanksgiving. The cost was a donation of canned goods to a local food bank, not a bad price for 2 hours of CPE! Get your employees involved with the charity. You will build camaraderie and create a greater sense of community in the process. Recognize and encourage contributors and supporters; you never know where it will lead. I first became aware of a vital community need when my employer offered blood donors the day off. I have since received America Red Cross “gallon pins” and continue to be a donor 25 years later.

GROWING YOUR BUSINESS THROUGH NETWORKING – PART 2

 

A professional looking business card is a cheap and effective advertisement, and absolutely essential in networking. And always have plenty of cards in your pocket. You can order cards at office supply stores or print shops for under 10 cents each, so distribute them generously as you meet new customers and prospects. Cards can also serve as instant coupons. Simply sign your name and indicate a percentage or dollar discount the recipient will receive. Consider the following in designing your business card:

  • Avoid high gloss finishes that smear when someone makes notes on them.
  • Resist the temptation to print cards yourself; the perforated edges and poor paper quality give you away and reflect poorly on your image.
  • Stay away from the more common templates. I was once networking with 7 people, 5 of who had the identical template as my card. I ordered new cards that night! A company logo or tagline adds distinction.
  • Business cards have two sides. Use the back to promote your marketing tagline, remind clients of appointments, etc.
  • There is nothing wrong with ordering “free” business cards from an online service like VistaPrint. However, their advertisement on the back of your card projects the wrong image. Pay the few extra dollars to have it removed.
  • Never, ever use an unprofessional sounding email address unless it is somehow descriptive of your business. Your name or business name are usually safe bets. Your nickname is not. Using your company as your domain name (rather than a free service like Hotmail or Yahoo) also adds professionalism.
  • I have a few personal quirks about business cards. The standard size is 3.5 by 2 inches. Since I store cards in a binder, if a card is larger than normal it will probably wind up in the trash. Also, when I see things like 555-456-7890 and JPSmith@xyz.com, I recognize they are phone numbers and email addresses. Don’t label them.

There is no reason you can’t pay commissions for successful referrals, assuming of course that you have analyzed your price structure and determined that it supports the added expense. But the practice can be prohibitive to cash starved businesses struggling to get established. Be aware that you may be setting a precedent for those in your network who would otherwise provide free referrals.

Lastly, think about Google and Facebook for a moment. Their marketing strategy was to create something of great value, and then give it away. It may have sounded crazy, but it’s hard to argue with their results. Your time, knowledge and expertise are extremely valuable. Share them generously, starting with your networking groups. Write articles, letters to the editor and even columns for your local newspaper or trade publication. Look for speaking engagements. You don’t need to restrict the subject matter to your specific business or service. Part of communicating your personal brand is just getting your name and face recognized. The most popular article I have written is called LinkedIn Tips – Three Free Ideas to Help Employers Find You. It was not directly related to my profession, but I received numerous thank-you notes for my efforts.

GROWING YOUR BUSINESS THROUGH NETWORKING – PART 1

The word “network” means to meet or interact with people for the purpose of making contacts and exchanging ideas. Sounds simple, right? Unfortunately, this simple word is a major stumbling block for many would-be entrepreneurs. Whether you are comfortable in front of large groups and talking with strangers or not, you need to communicate your story to as many people as possible.

Networking is a good place to begin educating others, especially since the only cost is usually a meal. Before you grit your teeth and jump into networking with both feet, a little advanced preparation will help break the ice when meeting strangers. First, write down your “10 second speech” and practice it in private. My speech goes something like this, “Hello. My name is Dale Schmeltzle, CPA, and my company is CFO America. We are a fractional or part-time CFO consulting firm, and we provide finance and accounting solutions for your business.” Whatever you say, communicate your message confidently, concisely and consistently. Wear a professional name tag, not a stick-on that invariably falls off during the meeting.

Here are some suggestions to help promote your business through networking.

Search the Internet for local business networks. After you’ve “kicked a few tires” choose several groups to join, but do not spread yourself too thin. If there are too many networking opportunities for one person, have a key employee join a group. It will be a growth opportunity for them and demonstrates your trust and appreciation. Attend every group as often as schedules permit and take the time to meet the attendees and get familiar with their businesses. Publicly thank members who provide referrals or advice. Make sure your product or a gift certificate for your service is occasionally given as a door prize. Giving away a basket of your products is an especially nice touch!

Form your own personal networking group. Every business deals with numerous vendors; bankers, insurance agents, accountants, lawyers, suppliers and so on. Select vendors with customer bases similar to your market and trade referrals. Make sure they have an ample supply of your business cards, brochures and other promotional literature. If some of your vendors fail to reciprocate, do not hesitate to use other vendors.

The goal of the Chamber of Commerce is to act as a business network to promote local businesses. Why not use your burgeoning networking skills to form your own personal Chamber of Commerce? I was recently in a frozen custard (if I was making this up I would have said health food) store. As I was leaving, the cashier handed me a 25% coupon. There was nothing unusual about that except this coupon was for another retailer selling totally unrelated products. The reality is the second retailer (let’s say it was a shoe store) would happily hand the identical coupon to any new customer who walked through their door. This idea is effective because except for the coupon, I would have never given the shoe store a thought. A similar strategy is being employed whenever you see a business prominently displaying other companies’ business cards. This type of informal marketing alliance only works with unrelated or complementary businesses and only if other merchants reciprocate with equal enthusiasm. It would be counterproductive for the first store to hand out coupons or advertise promotions for competing eating establishment. The concept works well for participants in close physical proximity and if marketing partners know and trust you, and are familiar with your product or service. Never risk your credibility on a questionable referral!

On Wednesday we will continue with more suggestions on building your business through networking. See you then!

Small Business Secrets To Increase Profits With Coupons & Discounts

Car salesmen know a secret about repeat customers. They don’t negotiate as hard as first time buyers. Insurance agents know longtime policyholders have fewer losses than new customers. Existing, happy customers in any business are more likely to make referrals. So if longtime customers are so valuable, what are you doing to turn new customers into long-time customers?

Here’s what one luxury spa does. First, new customers are mailed discounts for services they’ve not yet purchased. If they forget the coupons on their next visit, no problem. The spa tracks unused discounts. Customers separately receive discounts for friends and family, each card inscribed with their name. This adds a personal touch and allows the spa to track referrals. Finally, they are added to the spa’s mailing list for future promotions. Any bets on whether they receive a promotion on their birthday?

Maintaining customers is even more critical than winning new ones. Trying to regain former customers is therefore a logical strategy. Here’s what one store did to lure me back.

Over the last five years 20% of my clothes have come from one store, where I’ve used $595 of preferred coupons. However, I haven’t made a purchase in a year. The store knows my past buying habits. What they don’t know is they’re still my favorite men’s store. I just haven’t spent much on clothes recently. So it came as no surprise when I got a coupon for $25 off and extra points in their preferred customer program. I suddenly realized I can use a few shirts.

Simple data mining of your sales records will identify customers who have not made recent purchases. Send them a survey to determine what changed their buying habits or pick up the phone and ask. Alternatively, send a coupon and see if they respond.

Here’s another way to retain customers. Incorporate coupons, discounts or gift cards into preferred customer programs. Everyone is familiar with the example of diner cards where every 10th meal is free. It must be generous enough that customers perceive value, yet not so generous you have no hope of making a profit.

Here are some final pointers.

  • You may not be able to track individual buying habits. But you should get to know every regular customer. Knowing observable information like approximate age, gender, marital status, last purchase, average purchase and so on will accumulate a level of customer knowledge to tailor promotions to specific wants and needs. And you don’t need a million dollar information system. A simple data base like Microsoft Access or even Excel will help get you started.
  • Don’t diminish the value of promotions by imposing unreasonable restrictions. Allow gift cards and coupons to be freely transferable with reasonable expiration dates. Customer purchased cards should never expire. Many merchants honor promotions for a few days after expiration as a gesture of goodwill. If a sale brings a new customer into your business a week later, where’s the harm?
  • Depending on how gift card programs are structured and the states in which they are sold, merchants may be required to escheat (turn over to the state) any balance that customers fail to redeem. Potential issuers should consult their state treasurer’s office. Meeting the reporting requirements of escheat laws may strain the limits of the average small business accounting system.

And now a word about next week’s posts beginning on Monday, January 10.

Bestselling personal finance author Robert G. Allen said, “No matter what your product is, you are ultimately in the education business. Your customers need to be constantly educated about the many advantages of doing business with you, trained to use your products more effectively, and taught how to make never-ending improvement in their lives.”

If you fail to provide that education, you leave to chance whether potential customers will trade with you or a competitor across town or across the globe.

We’re going to make sure that doesn’t happen to your business!

Six Tips To Increase Profits With Coupons, Discounts & Gift Cards

On Monday I ended by asking what is the only thing more frustrating than failing to get coupons into your customers’ hands. Here is the answer and the solution.

Perhaps the only thing more frustrating than failing to get coupons into your customers’ hands is when competitors succeed in reaching the same people. No problem! Let your competitors do the heavy lifting and simply accept their coupons. It is a little know fact that many of the naation’s top retailers do exactly that. Research what competitors in your area are doing. In the meantime, imposing reasonable restrictions (for example matching up to 20% or limited to $25 off) is prudent as you measure the financial impact of the strategy.

Ralph Waldo Emerson said, “All life is an experiment. The more experiments you make the better.” Apply his philosophy through some low cost experimentation with the following marketing suggestions:

Program cash registers to print generic promotions on the bottom or back of sales receipts. Everyone will get the same offer, but at least the coupon is in your customer’s possession. That’s a step in the right direction!

An alternative is to put a stamp or sticker on invoices, or just drop a flyer in the customer’s bag at checkout. Starbucks sometimes stamps morning receipts for afternoon discounts on iced coffee, driving traffic to the slowest part of their day. Either tactic gives you the ability to modify promotions quickly and at minimal cost. The point is you are getting coupons into the hands of consumers who have already demonstrated a willingness to do business with you.

Supermarkets have long championed weekly specials. Why don’t you? There is no reason you cannot promote more than one item at a time, or offer product specific and generic promotions on the same flyer. Experiment with different combinations and gauge consumer preferences and buying habits in the process.

Discount end of season, discontinued or clearance items, below cost if necessary. That way you avoid additional expenses like restocking and insurance and minimize the risk of damage or theft during storage. If customers ordinarily buy multiples of seasonal or slow moving products, you can move inventory with a 2-for-1 or a buy-one-get-one free (BOGO) sale as it is called in retail. If not, give them away with another purchase. Another marketing wrinkle might be disposing of these items through eBay. Use the cash you generate to invest in new products.

Here is a closing thought on the critical marketing topic of coupons and discounts.

Design your promotion to accomplish specific marketing goals. If you recently introduced a new product line, offer 20% off those items. If your goal is to increase the average sale per customer, offer $5 off purchases of $30 or more. If you simply want to encourage repeat business, offer a free product most customers are likely to use. Supermarkets often use staples like milk or gasoline for their give-away promotions.

We’ll finish the topic of coupons, discounts and gift certificates with some final suggestions on Friday, January 7.

Best wishes until then! 

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