Sales Promotions And Discounts

Writen by Mary Eule

Sales promotions are designed to have an immediate impact on sales for a predetermined (and limited) period of time. They are used to increase customer demand by stimulating the marketplace, (examples include: coupons, discounts and sales, contest, rebates, etc.) and can be directed to the end user, sales staff or distributor (for example, retailers).

In this article I'll discuss some of the more common types of consumer and trade (targeted to retailers and wholesalers) promotions… ones that are most suitable for small- and medium-sized businesses. A word of caution: Be careful how you use promotions. They can be wonderfully helpful as long as they're not seen as gimmicky… this smacks of hucksterism and you don't want to go there.

Also, promotions are "pricey" (no pun intended!)… That is, they focus on providing cost deals. Therefore, you must use them carefully and not allow price to ever become your chief differentiator. Use them, but use them wisely and intermittently.

Consumer Promotions: Discounts

Sales: The word 'sale' is so overused and abused that it's become almost meaningless to consumers. Many companies use every imaginable occasion to advertise their latest, greatest price cuts in an attempt to lure the unwary consumer. This may work for a while but will hurt your business in the long run.

My advice is simple… if you're going to have a sale make sure it's legitimate and believable. If not, you risk damaging your credibility and reputation. For instance, a Mid-July Summer Sale is pointless. It's best to give the reason for the sale and as many specifics as possible. The following is an example of an effective newspaper ad:

Wednesday's Inventory Clearance Sale Everything is 50% Off!

We'll be closed this Thursday… Why? Because it's our annual inventory day. That means we have to count every single item in our store… And the way we figure it, the less there is to count, the sooner we'll finish… and we know how much you'll love taking advantage of our one-day prices!

Wednesday Only - Closed Thursday

Price Deal/Seasonal Discounts: Temporarily reducing the price during slow times or seasons. A good example of this discount is the ever-popular Happy Hour. Or how about a Maine beach rental in January?

Quantity: These are price cuts given for large buys. The reason behind them is to earn economies of scale and pass some (or all) of these savings onto customers. In some industries, buyer groups and co-ops have formed to take advantage of these discounts. There are two types:

1. Cumulative quantity discounts - Price reductions based on the amount bought over time.

2. Noncumulative quantity discounts- These are price discounts based on the quantity of a single order. The expectation is that they will encourage larger orders, thus reducing billing, order filling, shipping, and sales personnel expenses.

Prompt/Early Payment Discounts: Use these when cash flow is tight and speedy payments mean greater liquidity. Obviously, you can design these promotions to fit your specific needs. Just make sure the prompt payment is worth the discount. For example, let's assume you invoice your customers once a month and agree that payments are due with 30 days. In this case, you might offer a 2% discount if they pay within 10 days.

Promotional Allowances: These are price decreases given to a retailer for performing some promotional activity. They include an 'allowance' (fixed sum of money) for creating and keeping a retail display or co-op advertising.

Trade-Ins: Traditionally associated with the auto industry, an effective trade-in promotion has many advantages. The buyer's price is reduced by the amount offered for the trade-in, encouraging replacement sales without sacrificing perceived value.

And remember, "No one at 57 gets cosmetic deals." :>) (David Gest)

Mary Eule specializes in helping small and medium-sized businesses get and keep profitable customers. Formerly a Fortune 500 marketing executive; founder of two successful small businesses and award-winning speaker, Ms. Eule is President of Strategic Marketing Advisors, LLC. and co-author of a new book, "Mandatory Marketing: Small Business Edition". She holds a master degree in marketing from Johns Hopkins University. Log onto http://www.StrategicMarketingAdvisors.com for free articles, newsletter and helpful tools, tips and templates.

Telling Your Customers What They Want To Hear

Writen by Tom Richard

How often do you use stories to color your sales presentations?

Answer: Not enough!

I guarantee you would use them more if you knew how powerful they are in determining the outcome of the sale!

Telling stories is an effective and exciting way to deliver valuable information about your product or service. It also makes your prospect feel at ease with you, which means that they will not only enjoy speaking with you, but also enjoy buying from you.

The Makings of a Great Story

Your customer should be the focus of your story. Obviously the specific customer you're speaking with won't be a part of the story, but you should never forget they are the purpose for your story.

Your customers want to hear stories that speak to them. Tell them stories that they will be able to relate to personally; stories that address their concerns about buying from you. This means your story must favorably answer the essential questions customers ask themselves before making the purchase:

Do I like this salesperson?

The impression you leave on your prospect plays a key role in how that person views your product and company. When a customer feels connected with you, they will also feel connected with your product. Effective storytelling is personal, real, and makes the customer feel as relaxed as they would be speaking with an old friend. There is NO other way to match the type of connection a great story can create.

Do I trust this salesperson?

Customers don't want to hear how great you think your product is. Of course you would say it's great; you're trying to sell it! As salespeople, we often have a credibility gap to overcome. A success story about a prospect who loves your product will ALWAYS be more credible than your boasting of dry facts.

How risky is this purchase?

Customers won't buy if they think the purchase is too risky. If they are uncertain about the benefits of your product or are afraid it won't work as well as you say it will, they won't chance it! Use stories to calm these fears. Hearing how previous customers have felt the same anxiety, but were happy after they decided to buy from you will help them feel more secure. Knowing that your product has helped others will show them that it could also work for them. Once those fears are gone, they will feel confident doing business with you.

Can I see myself using this product?

As soon as your prospects can visualize themselves using and enjoying your product, the sale has been made. Telling great stories will help your customers visualize this. Hearing how others have benefited will spark their imagination. They will relate to the customers in your story and envision their own lives after the purchase of your product. Understanding the true value and benefit of your product will inspire them to buy it!

Am I excited about this purchase?

Customers want to enjoy their buying experiences! If they aren't excited, they won't feel driven to buy from you. Let them relax and enjoy themselves! Listening to success stories about previous customers will make new customers feel happy as well. They'll be more likely to buy if they enjoy speaking with you and feel the excitement you and others have for your product. Soon, your new customers will want to experience it for themselves!

The Best Place to Find a Great Story

So you've been selling your product for quite some time—think you have a whole bag of stories waiting to be told? I promise there are more. There are many more great stories hiding in the minds and memories of all the people in your company and industry. Unlock these stories and share them!

One of the easiest ways to collect these stories is to share them at every sales meeting. Go around the table and let everyone share a story about how a customer has successfully used your product.

Take the time to document these important stories to give them lasting value. When a new employee can read through a collection of success stories, they will instantly believe in your company and your product. When an employee believes in your product, they will be able to confidently and effectively sell it to others. Your collection of stories will be one of the few things that will be transferable from one salesperson to another; giving new employees instant access to countless stories for each new customer they come in contact with.

Telling stories is a simple, yet powerful way to connect with your customers. It makes others feel at ease speaking with you and feel confident in their decision to buy from you. Understanding the power of stories will also give you a clear edge over your competition.

Picture this: Your competitors will talk to the same customers you will. While your competitors ramble on about the features and superiority of their products, you will be telling engaging, entertaining and effective stories about how your product has helped REAL customers. Which person would YOU rather listen to? Which one would YOU rather buy from? Give customers what they want to hear, and they'll give you the sales you want!

Tom Richard conducts seminars on sales and customer service topics nationwide. Tom is also the author of Smart Salespeople Don't Advertise: 10 Ways to Outsmart Your Competition With Guerilla Marketing, and publishes a free weekly ezine on selling skills titled Sales Muscle. To subscribe to this free weekly ezine go to http://www.tomrichard.com/subscribe

Tips For Increasing Your Profits With Gift Certificates

Writen by Rena Klingenberg

Offering gift certificates is an excellent way of increasing sales by solving your customers' gift-giving problems. Often people would like to give your products as gifts, but are hesitant to choose a specific item for someone.

I'm a jewelry artist, and when I realized I was losing sales to these potential customers, I started offering gift certificates – and discovered a wonderful sales tool.

Wherever you sell your products – at retail locations, shows, home parties – be sure to have an eye-catching sign advertising "Gift Certificates Available in Any Amount". And tell undecided customers about it verbally, too, emphasizing the benefits of a gift certificate, and how much their recipient will enjoy choosing the exact item they want.

How to Make Your Own Gift Certificates

Use your computer and printer to make special, fancy certificates using perforated paper or postcard stock you can find in office supply stores, and have matching fancy envelopes to go with them. They don't need to cost you very much, but they should really look like a special, festive gift to give them extra appeal!

Consider adding enticing photos of some of your most popular products. My gift certificates have a neat vertical border of jewelry photos on each side.

Here's the information your gift certificates should have on them:

• your business name and location, plus other contact info

• a "To:" line

• a "From:" line

• an "Amount:" line (for the dollar amount)

• "custom orders welcome", if applicable

• the expiration date, if you want to limit the time period the certificate can be used

• the certificate's unique number – on your computer or by hand, print a unique number (101, 102, 103, etc., or whatever numbering works for you) on each certificate's bottom corner, so each can be individually accounted for.

When you sell the certificate, you should write the dollar amount and expiration date (if any) on the certificate yourself, and then have the person purchasing the certificate fill out the To and From lines, so it will be in their own handwriting for the recipient to see. Then enter the certificate's information in your log.

How to Keep a Gift Certificate Log

It's important to keep a log of each gift certificate you sell. Keeping a record of each certificate sold will ensure that you don't wind up honoring a counterfeit certificate, or one with a changed dollar amount when someone comes to use it. My log has 6 columns, and for each certificate I sell, I record in my log:

• the certificate's unique number

• the purchaser's name

• the recipient's name

• the date sold

• the dollar amount of the certificate

• the date redeemed

• optional seventh column: expiration date.

I keep my log sheet and a stack of ready-to-sell certificates together in a two-pocket folder, along with a fancy pen for filling out the gift certificates in style when they're sold.

Use Gift Certificates to Their Fullest Profit Potential

Gift certificates can be a great source of back-end sales. When the recipient comes to redeem the gift certificate, it's easy to sell her an add-on item or two. Often she is already predisposed to splurge on something to go with the item she's getting for free with her gift certificate, and needs only a little encouragement from you to purchase extras. For example, in my case, the recipient will often purchase matching earrings to go with the bracelet she gets for free with her gift certificate. So be sure to show enticing things to the recipient that could accompany the item she chooses for her gift!

Use a gift certificate sale as an opportunity to add two new customers to your mailing list: the person who purchased the certificate, and the person who received it. Obtain permission from each to add them to your mailing list. Both of them are now pre-sold on your products, your service, and especially on your solutions to their gift-giving problems. There's a good chance they will respond favorably when they receive a special offer from you before gift-giving holidays.

About The Author

Jewelry artist Rena Klingenberg is the publisher of http://www.home-jewelry-business-success-tips.com , a free online resource of articles and tips to help jewelry artists achieve their goals.