The sales momentum gained from these kinds of campaigns can easily be transformed into problems with profitability and falling brand value.
Wednesday, October 4, 2017
Ariel Baños, a specialist in price management, points out five fundamental tips when planning and executing product promotion campaigns:
1 - Limited duration "The results were excellent, lets extend the promo for another month."This phrase can be heard right before a serious mistake.
2 - Attractive and easy to understand formats "Take advantage of a 30% discount on a third unit, with voucher applicable on the next purchase". Confusing and complicated formats violate the level of customer acceptance. 3 - Action focuses on defined sectors "Take advantage of one month of discounts on everything". Not all customers need a discount before buying.
4 - Prevent any effect on the brand value. "Our brand is synonymous with promotions." This type of association endangers the brand's reputation. 5 - Measure economic results carefully. "We sold more, the promotion was a success." The billing amount is not a good indicator of the profitability of the promotion.
Selecting products with limited sales potential because of price, defining the group of clients that will be reached by the promotion and quantifying the profits that the company will receive after offering discounts are factors that must be evaluated when applying strategies of this type.
In order to avoid carrying out promotions in an intuitive way, without an integral evaluation of the action, both in terms of costs and benefits, Ariel Banos, founder of Fijaciondeprecios.com, proposes seven steps to correctly define a Profitable Promotion.
Offering low prices, promotions and discounts similar to those found in U.S. stores, is part of the bet that AR Retail seeks to attract customers, especially millennial, in the Costa Rican clothing market.
At the beginning of 2019, AR Retail, a company dedicated to the marketing of the brands GAP, Banana Republic and Old Navy, reported that it plans to invest $6.2 million over the next few years in the start-up of nine stores in the Greater Metropolitan Area.
Properly establishing the criteria for the application of discounts or special conditions helps to wisely manage price reductions without compromising the company's profitability.
Price management specialist and Fijciondeprecios.com founder, Ariel Baños, explains how through the "strainer strategy" discounts to customers can be managed intelligently.
Tips to prevent promotions, discounts and special offers from leading to profitability problems.
By Ariel Banos, President and Founder of Fijaciondeprecios.com
5 Keys to implementing profitable promotions
When sales start to slow, promotions and special offers look like a great lifesaver.However, these measures do not always improve business performance.
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