Smart retail offers that won't eat your profits

Promotions have been used for centuries, first by traditional mortar companies and now by eCommerce websites to drive sales, up their customer base and engage with existing patrons. For consumers, a promotional advert often creates excitement about the possible goods they might be able to get hold of for a lower price, and prompts a click to see what is on offer. But, as a retailer, the use of discounts and deals can count against you if they aren’t implemented properly. Revealing sales items too often, or to the wrong customers can diminish profits and ultimately hurt your business. Avoid the mistakes that can so easily be made with these five smart offer tips that won’t eat into your profits.

#1 Reward loyal customers and not bargain hunters

Send personalised offers to your most loyal customers who you know are more likely to shop on your site, rather than someone who is just looking for a cheap deal. Search through your data to find your most frequent and biggest spenders, and reward them with a specific discount for their next purchase. Not only will you be targeting a customer that is more likely to make the purchase, but you can tailor the discount to suit that specific customer’s needs. If, for example, a customer frequently uses your site to buy shoes, you can give them a certain percentage off their next shoe purchase. This builds brand loyalty by rewarding frequent customers.

#2 Offer discounts on certain quantities

An effective way to improve sales is by offering discounts once a customer has requested a certain amount of a product, effectively rewarding customers for buying more. If a customer requests a certain number or more of an item, you can offer a percentage off their final total. This helps out consumers who are buying in bulk for an office or factory, for example. Not only does this offer a special rate to those buying bigger quantities, but also makes customers aware that you do reward those who buy large quantities from you. This will encourage them to continue buying your stock, instead of looking for a better deal elsewhere.

#3 Avoid too many promotions

While promotions are a clever way of getting customers excited about your products, they can be overdone. Avoid falling into this trap as customers will either start ignoring your frequent promotional mails, or take full advantage of them. While this may drive sales, the lower prices will drive down your total profitability. Choose particular times of the year to advertise deals and discounts so that it stays a novelty. The best times to launch a promotion is in time for a new product launch, during a big holiday season, when a new customer signs up to your newsletter or to reward customer loyalty. Create a calendar of promotion dates and stick to them.

#4 Offer free shipping on particular deals

Free shipping has proven time and time again to encourage sales. The less customers have to pay for their goods to arrive at their door, the more appealing the purchase sounds. But don’t just offer free shipping to everyone, rather offer it to customers whose shopping baskets match a certain amount. This way you’ll know that you’re still getting a decent amount of profit from the sale, and can afford to offer free delivery. Every business is different, so calculate the minimum amount according to your your financial targets for the year. Study the results after a period of time to see if you’re still making a profit with this deal in place, if not you can always adjust the set price.

#5 Make use of value added promotions

Just as the use of discounts ups sales if implemented correctly, so do value added promotions. Instead of lowering a price on a product, rather add a free product to orders over a certain amount or with certain products. This gives you a chance to reduce the stock of items that you’re struggling to sell, as well as giving you the opportunity to personalise the giveaway. If a particular customer frequently buys cycling gear, for example, offer them a free pair of cycling socks or gloves to go along with their purchase. This free product will encourage sales, as well as build loyalty if the giveaway is correctly personalised.

As with any online sale, a website can experience high volumes of traffic during the promotional time. The last thing you and your customers need is for the payment process to crash or work slowly. This could lead to customers abandoning their carts altogether, defeating the purpose of the promotion. Ensure your website makes use of a payment gateway in Nigeria that can handle a high volume of transactions at once, such as PayU. This way you can rest assured that a large amount of online payments in Nigeria can be processed quickly and efficiently, ensuring customer satisfaction. If implemented correctly and with the right technology in place, promotions have the potential to increase your customer base, drive sales and increase repeat business.