Plus, the Pros and Cons of Promotions
Last year, I warned against cheapening your brand and business reputation in an effort to offer the best “deal.” But more sporadic promotions, especially if well-calculated, can feel special and enticing to customers. Some businesses do a fantastic job with promotions and strategically use them to grow their sales, while others fail pretty miserably. So, what are the best discounts to offer pet business customers? Before I dig into the different types of promotions you might consider testing, here are a few pros and cons to consider.
Pros:
- Increases customer loyalty
- Helps gain new customers
- Moves unwanted stock
- Works quickly
- Increases foot traffic and conversions
- Can help meet sales goals, if your profit margin allows it
Cons:
- If promotions are overdone they can cheapen your brand
- May attract the “wrong” customers outside of your target market
- Can eat away at profit margins if they are already slim
- Risk “training” customers to wait for the next predictable sale
- Focuses too much on price, instead of service
You’ll also want to ask yourself, what is my goal for using promotions? Are you hoping to achieve increased sales, more foot traffic, greater brand awareness, increased customer loyalty, or do you just need to unload specific inventory? Different types of promotions will help you achieve different goals.
Percentage or Absolute Dollar Discounts
Discounts, in either percentages or absolute dollar amounts, are the most common type of promotion. Interestingly, your choice of either percentages or specific dollars off will have varying affects, even if they equal the exact same discount, based on perceived value.
Perceived value is what seems like a better deal to the consumer, even if it’s not. If you’re confused about which option to choose, keep the Rule of 100 in mind. For items under $100, use percentages, and use absolute dollar amounts if the value is more than $100.
So, what strategy will have the best return will depend on your price points. For items like pet food and toys, percentage-based discounts are more likely to drive sales, while more expensive services like training will benefit more from a particular dollar off discount. $100 off a $1,000 service simply feels like a much better deal than 10% off, even though it’s not.
These can be implemented either in-store or with physical coupons, scannable digital coupons, or an online coupon code. The latter options are particularly ideal if you’re trying to grow your ecommerce business.
Bundle/Multi-Buy Sales
This will give customers a discount only when a combination of products is purchased together. If you have product that you need to move without taking a loss, pair it with more popular items at an overall discount compared to buying them separately. The discount doesn’t even need to be that large to be effective, because remember, it’s all about perceived value.
A Little Something for “Nothing”
Something free is often the incentive that pushes a customer from wavering to filling their basket. This could be free shipping (ideal if you want to increase ecommerce sales), BOGO, or a free gift. It should be noted that the BOGO sale is always more enticing when the second item is 100% off vs. the cheaper item being 50% off, so your current margins would need to allow for it.
Free gifts are also popular, but even though they’re free, they should still have quality and value that is of interest to your customer. Gifts that make sense for your clientele could be something small like pet treats or grooming products.
Exclusives
Exclusive offers are a great way to reward your most loyal and high spending customers, or to attract new customers. These should be far less frequent than an ordinary sale, but offer something of greater quality or value. It could be a larger discount or access to products and services that others aren’t able to get. If you want to create a higher-end feel to your pet business, aim for more exclusivity over traditional promotions.
And don’t discount (no pun intended) what a loyalty program can do for your business. If you offer boarding or doggie day care, then consider offering a free/discounted or upgraded visit after they’ve been there a certain number of times. It provides your customers value in the moment, but goes a long way toward creating a loyal customer, which has far more value for you in the end.
A few other forms of discounts to consider are offshoots of what we’ve already covered. Flash sales are one day promotions, which are once again most ideal if you have a strong ecommerce business. And tiered promotions are sales contingent on reaching a certain spending threshold that could increase as you reach each new tier of spending. For example, “purchases of at least $50 receive 10% off; $75 gets you 15% off,” and so forth. This is a fantastic way to increase each sale with the perception of “the more you spend, the more you save.”
Mystery/surprise discounts are great for getting customers to return to claim their reward on their next visit. Think closed envelopes or scratch-offs. Even if the discounts are all about the same, customers will feel like they won something if theirs is on the higher end of promoted possibilities. This is a form of discount that should be used a bit more sparingly if you want to maintain a higher status image.
And promotions tied to increasing your marketing awareness are rewards for customers who help build your brand. Incentives for referrals, reviews, sharing on your social media platforms, or adding their information to your email list are becoming increasingly popular. Building a brand today is incredibly dependent on maintaining a strong online presence, so we all need the social currency that our satisfied customers can provide.
If you’ve decided to try using promotions in your pet business, know it’s better to offer fewer sales than more, always keep your clientele and price point in mind, keep offers time sensitive, and don’t just limit yourself to traditional sales times. Have fun and keep it personal. Think beyond the holidays with promotions tied to events like the anniversary of your store opening or even National Cat or Dog Day.
If you’re interested in more getting insight about what promotions can bring you the biggest bang for your buck, contact me today and I’ll help guide you in what’s best for you particular business.
