Now before we start, a word of warning…. Not all of these strategies are going to be suitable for every business. Consider your product or service offering carefully and make a judgement call. However don’t be afraid to give something a go. Just because it hasn’t worked for someone else or hasn’t been used in your industry before, doesn’t mean it won’t work for you. Dare to be different and stand out from the crowd.
Today we are going to examine 3 strategies that are simple to implement that will generate new business, increase business from your existing client base and build repeat business.
Frequent Buyers Program
We’ve all seen the major airlines introduce these types of programs over the years and now it has become an expectation of their overall service offering. Hotel chains have also jumped on board in an attempt to encourage repeat business. For the coffee drinkers amongst us the local coffee shop has even adapted this strategy. It need not be anything fancy. A simple business card or conveniently shaped card that fits neatly into the wallet will do just fine; it need not be anything complicated.
The idea is too not dazzle your customers with brilliant designs but encourage them to return to your place of business rather than spreading their patronage around town. To make the incentive even more effective, you should tie it to an expiration date so that the stamps, punched holes, points or credits on the card have to be accumulated and redeemed within a certain time period.
You can make this type of program even more effective by ensuring you capture the details of the customer you are issuing the rewards card too. The most effective way to do this is to capture the details of the customer before you issue the card, or at least when they redeem their reward when the card has been filled or the promotional period has ended. This then enables you to communicate with them on an ongoing basis and add more value and enhance their experience with your business.
Discounting is probably one of the most commonly used marketing strategies. At some point in time I would guess every business in Australia has had at least one discount promotion… however, if overused it can quickly lose its effectiveness.
There are many examples of markets where the discount promo has been done to death and is now having adverse effects. The jewellery business is one that comes to mind. The public has been trained to expect huge discounts on retail jewellery and as a result, is reluctant to pay full retail price. Rugs are another example – who has ever bought a rug at full price?
This customer mindset has also been created by artificial discounting. This is the practice of quoting high retail prices only to discount the product to seal the deal. Be very careful when using this tactic. It can come around and bite you, as customers realise your sticker price is meaningless and everything becomes negotiable.
One company that has effectively managed the discounting in a very competitive market is David Jones. DJs is not renowned for its discounting. However, when they run their “Once Yearly Sale”, the discounts are genuine, it generate attention and gets results.
If you are going to use discounting as a strategy, it is important to have a logical reason tied to the promotion. Otherwise you run the risk of essentially admitting that your regular prices are excessive and you diminish your value statement. Inventory overstock, bulk purchase, an anniversary, introductory offer or, new release are examples of acceptable reasons for discounts. I’m sure you could come up with many more.
A premium offer is essentially, “Buy this, get this free”, or variations thereof. This strategy can work well both on the B2C level and the B2B level.
An example of premiums in the B2C markets would include retail offers of free gifts with purchase. The smarter marketers don’t give away the same product as the gift, they introduce new products as a way to encourage uptake of new inventory items. For example, a free lipstick (new range) with every foundation purchased. All parties win. You’ve maintained the value and the integrity of your pricing and have planted a new product in the hands of the customers which can encourage repeat purchase; you’ve also built a relationship with your customer. The customer also wins as they have benefited from an increase in perceived value and get to experience a new product.
Another example of premiums is discounted products for additional purchases. E.g. Second item half price. The concept is simple, the client was likely to be purchasing only one unit anyway and the second sale would’ve been missed. The idea is to protect the full retail value of the initial product and discount or giveaway the margin on the second. Once again a win win result.
An example of a B2B premium strategy would be the targeting of individuals responsible for the purchase of business products and services. A free gift of a colour TV, DVD or holiday voucher are becoming popular with the purchase of office supplies, consumables and business related products. In effect this type of offer let’s the business customer spend tax deductible business dollars for supplies and receive free and tax-free a gift they will use personally.
Have a close look at your market, is it dominated by one type of promotion, is there a lot of discounting or premiums offered? Perhaps it’s time to have a look at breaking the mould and trying something different.
More next week.
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