‘Tis the season for deep discounting. But there are ways to attract customers without storewide sales.
At a glance...
Focusing on VIPs
Gifts with purchase
Slashed shipping costs
“In recent years the Black Friday (BF) phenomenon has swept the globe, encouraging brands to produce stuff they know they’ll sell at discount… more and more stuff,” the brand wrote on their social media accounts.
“But that’s not how Spell works. We only make what we think our customers want, and often even then we don’t make enough, and so our garments feel special – we value each garment and know the care and effort that goes into making each one.”
The brand went on to explain that their decision didn’t mean they wouldn’t ever discount again (and there’s still a regular sale section on the brand’s e-comm store). However, what they called the “frenzied discounting” of Black Friday Cyber Monday (BFCM) simply didn’t feel like it aligned with the brand’s values.
Since then, the brand has consistently preferred to reward their customers with other lead generation strategies and lead conversion tactics such as marketing promotions that added value to their interactions with Spell.
Examples include their loyalty-focused ‘Curators’ Club’ and buzzy in-store product launches - rather than simply slashing dollars off the total spend. Many other brands have also announced that they, too, plan to give BFCM a wide berth.
With the global threat of rising inflation and its corresponding threat to customers’ discretionary spend and confidence, it can be tempting for a sales team to think that the only way to attract potential customers, generate new leads and convert them into sales is via heavy price cutting. And while discounting can often translate to a good short-term sales bump, it can have its drawbacks if it’s overused.
“One of the biggest mistakes people make is overusing blanket discounting,” says Catherine Erdly, a retail expert from The Resilient Retail Club. “Once you get into that situation, it's hard to get out of it because people get used to the idea that they can always buy at discount.”
Erdley says that once you have a person trained to expect constant sales it can be very hard to flip them out of that mindset, even with the best marketing tactics around. “I have worked with clients in the past who were overusing this kind of discount and therefore finding that the customer was getting used to buying from them on sale,” she says. “It was a hard transition to remove those discounts, but they did move to a more varied promotional schedule. They kept the blanket discounts for very special occasions, for example – perhaps twice a year – and that helped them build a much stronger bottom line for their business.”
It could be that Black Friday (or the holiday sales period) is the right time for your business to jump onto the sale train, but consider pulling back on the discounts and offering your target audience and loyal customers something different at other times.
“One of the biggest mistakes people make is overusing blanket discounting.”
Here are some other value-add ways to generate new leads and give customers a reason to keep returning to your store:
Never underestimate the value of offering customers something free that also teaches them something and, in the process, deepens their engagement with your brand. Lead generation 101 has moved beyond blog posts, but can be as simple as a freebie to sign up to a newsletter. Sustainable coffee brand Alpaca Coffee has recently begun offering their prospects a free, downloadable ‘Brew Guide’ via their landing page that teaches them how to make the perfect cup of coffee at home. As far as lead generation ideas go, it's a simple but extremely effective one.
“It’s a value-add hook that encourages them to sign up to our newsletter,” says founder and CEO Victoria Poon. “We’ve only had it up for a couple of weeks and it’s really working well for us.” Of course, the biggest benefit for the brand is lead generation--in other words, getting those customers onboarded into the email list, but beyond that, Alpaca customers associate the brand with the acquisition of something genuinely useful. “Getting people to make better coffee at home made sense for us as a company, especially as a specialty coffee brand,” Poon says.
Your VIPs are your business’s lifeblood – not only are they your big spenders but they are your ambassador, positive marketing messengers who spread awareness of your brand out in the wider world. So, nurture them by giving them something that others don’t get.
“Ultimately, one of the best ways to grow your sales is to have a specific strategy for your VIP customers,” says Erdly, who suggests paying close attention to email marketing. “Make an effort to nurture your email subscribers by offering them perks such as early access to sales, or extended time periods for discounts, or perhaps the first view of new products.”
It’s an oldie but a goodie, because who doesn’t love a freebie? A solid gift-with-purchase (GWP) marketing strategy is one of the best ways to convert ‘maybe’ browsers into buyers and land page lurkers into sales. In fact, a recent Afterpay survey found that 85 percent of Australian shoppers were interested in free gifts, and willing to spend up to $AU250 ($USD 167) to secure one. Beauty brands are historically great players in this space, as gifts with purchases generate new leads and deliver extra value to customers without affecting brand equity. UK beauty brand Trinny London delivers a successful GWP marketing strategy by including a swag of samples with every order.
"One of the best ways to grow your sales is to have a specific strategy for your VIP customers."
Joining forces with a brand that you know has the same values as your own, and that your customers are likely to respond warmly to, is a win-win on all fronts. Recently, fashion brand Oroton created a bespoke gin with Archie Rose, a boutique spirits brand. They leveraged the partnership by running a competition to Oroton’s email subscribers, where a winner would get a prize pack that championed both brands including an Oroton voucher, several bottles of the Oroton/Archie Rose collab gin and in-store sessions (a styling session for Oroton, a masterclass for Archie Rose).
The partnership was a chance for customers to engage more meaningfully with both brands, as well as leveraging each other’s customer bases for intensified lead generation and offering opportunities to create new content marketing.
A loyalty program is a well-worn way to create new leads, incentivize repeat purchases and ensure your VIPs feel valued. Independent homewares brand Number Fourteen Interiors has a particularly generous program, and their sales team administer it via an old-school card and sticker that arrives with your first purchase. After that initial purchase, you get a sticker every time you buy. Once a customer has collected five stickers, they’re sent a branded canvas bag that includes several goodies. After 10 stickers, they receive one of the brand’s curated ‘monthly gift boxes’ (which is another clever marketing strategy to expose customers to new products). “I hope our loyalty cards are the perfect way to show how much your orders mean to me,” writes owner Nicola Walton in a card that accompanies the box.
The primary reason for your brand to support a charity or sustainable initiative is because it’s something that you and your team truly believe in. The added bonus is that it can appeal to a potential prospect, be a way of showing customers that you align with their values, and it may even encourage them to make a purchase. It's a marketing and sales win.
You could donate a part of your profits – like Alpaca Coffee, which gives one per cent of their profits to reputable sustainability organisation 1% For the Planet. Or you could offer a tangible sustainability initiative like Australian eco store Seed and Sprout, which gives customers the chance to recycle any silicon products they’re no longer using. The company sends a ‘returns slip’ as a CTA to the customer, the customer posts back their silicon products, and Seed and Sprout make sure they’re recycled via TerraCycle.
If your brand consistently demonstrates its sustainability credentials to its target audience, it could translate into a higher spend overall. A recent report by the Wharton School of the University of Pennsylvania shows that consumers say they are happy to spend more for eco-friendly products, led by Gen Y but closely followed by all other demographics.
Free shipping is another marketing tactic that's an alternative to deep discounting. Data shows that nearly half of all abandoned carts are left to wither because of an unfavourable or unexpected shipping charge. So, wherever you are able to offer free shipping, do – it may help improve your conversion rate.
Of course, free shipping doesn’t work for all merchants; particularly if your product is heavy or the bulk of your customers are overseas. If you can’t offer a blanket free-shipping rate on all sales, you might want to consider a tiered system: different prices for different delivery times or distances, or if a person spends to a certain amount. Flat rates can also feel less confronting than a shipping strategy that’s too complicated or only reveals itself once you’ve added an item to cart.
And be as transparent as possible. If a potential customer understands your shipping policy as soon as they arrive on your landing page (a banner at the top of the page can be a good way to communicate this), they won’t get any nasty and off-putting surprises in the shopping cart, and your conversion rate will thank you.
"We aim to tailor our offers to customers depending on their phase in the purchase cycle.”
The value-adding that works for one prospect may not work for another, and it’s up to retailers to meet their customers in the part of the purchase journey that they’re at.
"At Coco & Eve we adopt a mix of strategies for turning leads into customers,” says Joshua Pinnavanam, customer relationship manager at beauty brand Coco & Eve. “Instead of a one-size-fits-all approach, we aim to tailor our offers to customers depending on their phase in the purchase cycle.”
“Our foundation is a strong welcome offer supported by seasonal offerings onsite which are customized to each market. For example, gifts with purchase and seasonal discounts. We also carefully curate bundles of best-selling products to attract purchases and we continue to educate our audience through blogs and EDMs."
The first step to personalizing offers and incentives is to efficiently segment your customer base, and there is a range of tools and platforms that do this, from LoyPal to Emarsys and Optimove.
The bottom line is that BFCM and lead generation ideas doesn’t have to mean deep discounting; there are many other ways to add customer value and increase sales, without slashing prices storewide.
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