Should You Make a Deal?
Economic indicators continue to act like a pendulum that is stuck in the middle and is barely moving. Most companies are still searching for ways to boost revenues and get the pendulum to move toward their goal line. Here is an idea that’s been used for centuries but still is an effective approach for many companies trying to gain or increase momentum.
As summer winds down, parents and kids are doing their back-to-school shopping. Deals for students and teachers abound at local malls and retailers all across the county. The National Retail Federation say’s that families with children will spend an average of $688 on school clothes, supplies and electronics this year. Like they do for the holidays, many retailers are willing to cut their profit margins to increase volume and make way for new inventory.
Every buyer of a product or service likes to feel like they “got a good deal”. Does your company offer “deals”, either regularly or occasionally? If you already do, or are considering it, you need to make an offer which advertising agencies refer to as the “compelling offer”. Translated: an offer that is good enough to make me buy…now. It could be “two-for-one”, “10% off”, “this weekend only”…the possibilities are endless.
It’s fairly simple for a retailer to put an item on sale. But for some industries and professions it’s more challenging to come up with a compelling offer. Occasionally it’s impossible (want to be operated on by a brain surgeon offering a discount?) But many industries that you wouldn’t think could come up with an offer just need to do a little brainstorming.
For example, let’s say you own a new/used equipment company. Having trouble selling used forklifts? How about renting them? “September special: rent a forklift for one week and get a second week at half-price”. Use your imagination. You have items sitting on your shelves, or a service to offer, that people want today but will only take action if they believe they are getting “the best deal”.
Some business owners refuse to discount because they believe that once they offer a discount their customers will no longer pay full price again. There is no statistical evidence to support that theory, but to each his own. Discounting isn’t for everyone. However, if you are considering offering a discount to increase sales here are a few things to consider as you construct your offer:
- How are you going to get the word out? Online? Print? Radio? A combination of these?
- How much can I discount to entice my prospect to take action yet still make a reasonable profit?
- What is the time limit on my offer (instills a sense of urgency)?
- Can I sell one product or service at full price and discount an add-on?
- What is my competition doing?
Only you can decide if you want/need to discount right now. The end of summer is a great time to clear out old inventory by offering it at a discount. And getting that buyer in the door may just lead to additional business sold at full margins.
We hope you’ve had an enjoyable and profitable summer and that the fall season treats you and your business well.
Regents Bank has offices in La Jolla, San Diego, Carlsbad and El Cajon, CA., and Vancouver, WA. For more information on Regents visit out website at www.regentsbank.com.