This is the full list of sales promotions that I can think of. The list is old; and the success of the promotion lies in:

1. The quality of the idea.
2. The execution of the promotional mechanics.
3. The timing.
4. The relevance to the target market.

I thought it is a good idea to run through the list and see if there is anything you haven't thought of. Remember that just because we are tired of a promotion, doesn't mean that the customer is.

Consumer Promotions

• Value adds (like free delivery, free blow dry)
  
• Trade-Ins
• Taste Tests
  
• Premium Items
• Money Refunds/Rebates/ Cash backs
• Loyalty Programs (Points to redeem on incentives)
• Joint promotions (with buddy retailer/ alliance partner)
• Gift Vouchers
  
• Free samples
• Free gifts
• Finance deals
• Discounted prices (Cents-off Offer)
• Demonstrations (non-food 'taste tests')
  
• Coupons
• Consumer Contests and Sweepstakes
• Celebrity endorsement (signatures)
• Cause-related and fair-trade connections
• Buy-One-Get-One-Free (BOGOF)

Anyone add anything?

Have fun

Dennis

PS: If you think putting your teams (or yourself) through a mini-MBA (retail OR management) FOR FREE is a good idea, drop me a line dennis (at) ganador.com.au, or call by getting numbers on the website.

I am intrigued by the notion of having a vision. It seems to be universally admired and often the first (if not only) criterion mentioned when discussing leadership.

What is the difference between a vision and a dream? Vision and fantasy? Vision and a point of view?

But more importantly, what is the trick in moving from NOT having a vision to having one? Like how do you really do it? Can you ‘DO’ vision; i.e. can you acquire it, or is it something like ball sense or the ability to carry a tune; it can be improved but not acquired?

The best I can do is to describe vision as a personal concept of some future outcome.

I would suggest that clarity about the required actions that will deliver that outcome need not be included in such a definition. Translation of the vision into actionable strategies is the domain of management, and could conceivably be independent of the actual vision.

If vision does not include the translation (and subsequent execution) into the actions, then vision is purely a mental construct. Vision must then be born from conscious and /or unconscious mental activity. To put it simply, it is something that springs to mind.

If it were largely the product of the rational mind, then any person would be able to create/ have a vision, and again, I am not certain that any rational view of the future (the everyday garden variety) really constitutes what I understand from the term ‘visionary’.

So, a vision must also have an element of contrariness to it; and it certainly is a view of the future that is different from where the momentum of the status quo would ordinarily take you (or the company).

So a vision should then be defined as an intuitive mental construct of an unusual future.

This new definition would imply that visions somehow come about and are not likely to be something that can be acquired through practice.

As the apostle Paul advises about the speaking in tongues; it is rather useless if there is no one around to translate it – and the same seems true of a vision.

What does all this mean back at the ranch?

• Encourage mavericks and tolerate the weird – they may become leaders of the future.
• Embrace intuition – nothing ground-breaking (except tornados) has ever come from extrapolating the ‘usual’ trend.
• Build some triggers into your strategic plan that mandates change, even if it is only apparently change for the sake of change. (The alternative is atrophy.)
• Learn to trust your gut.

We need some leadership – go for it!

How good is your customer service?

The attached graphic should be worth the proverbial thousand words – but since I am not a very good designer, it probably needs some help.

1. Dead contact

The only interaction is by complaint form or voice mail.

2. Dumb contact

There is a person at the other end… but it does not help much.

3. Easy escalation

There is a person - who can merely pass the buck.

4. Active listening: Limited action

The next person listens, expresses empathy and makes the customer feel better, but still no action.

5. Active Response: Own the problem

This organisation is geared towards solving problems with empowered employees.

6. Pre-emptive

Pro-active organisation that actively seeks feedback and reacts to those.

7. Integrated Customer Experience

The entire organisation (using the 7-S framework) is designed to deliver customer service – in its structure, in its systems – in totality.

If you have not followed the series of chats, let me try and recap briefly:

• Retail Marketing is about delivering a proposition (supply side) that meets a customers needs (demand side).
• By now you understand that the proposition is more than product, but the whole ‘package’ wrapped up in price & presentation.
• We also know that ‘product’ is not the ‘steak’ but the ‘sizzle’.

That is the supply side taken care of, now we need to look at the ‘demand side: what do customers want?

In previous post we stressed that people are strongly influenced by avoiding ‘pain’ – rather than the benefit of owning something.

For instance, in my business, one of the divisions offer nationally accredited training. (I.e. certificates as offered byTAFE, funded by the Government.) However, most retailers don't find that an 'attractive offer, even though it is effectively free! ("It is a hassle, it impacts on operations, the staff will leave soon anyway - why bother" - etc.)

We therefore developed the package in such a way that the whole program is geared towards making staff more productive.
We address the 'pain' in the retailer's world of having to pay for people who are unproductive and just hanging around when they could be adding value.)

Another example: When a customer reacts to “last few remaining” or “limited time”, they are strongly motivated by the anticipated regret (= pain), and less so by owning the soon to be extinct ‘offer’. (Although they must have some rationalisation for making the purpose of course.)

At a macro level the ‘need’ is the need to ‘survive’. Survival instinct is the strongest motivator: and your job is to find out how it manifests in your industry/ category. (Physical survival = eat, drink, sex etc. But also survival of ‘self image’, survival of your ‘status’ in the eyes of others and ‘social’ survival etc.)

• A need is fundamental and generic. (E.g. Food. Think Maslow’s hierarchy of needs)
• A want is that same need shaped by culture (E.g. not just food, but a hamburger.)
• Market demand = wants + money available to satisfy the want.

So, how do you convince the customer that your retail proposition is the best way to satisfy their wants?

The governing principle that applies to whatever you do in the act of persuasion and selling is ensuring that you demonstrate how your proposition reduces/eliminates their pain. This is known as Omega Strategies. (This is the new way of selling.)

This approach is supported by Alpha strategies – which provide information on features, advantages and benefits that give people the opportunity to (post-) rationalise their initial ‘decision’. (This is the 'old' way of selling.)

Tune another time for a few pointers on typical Omega Strategies that actually work in persuading people. (More so than rattling off product features I can asure you.)


Have fun

Dennis

How to sell to someone in the retail environment then? (Read other entries in the series by reading previous posts on this blog.)

It is very easy to SAY one must identify the needs of a customer, but it is rather more difficult to do, because whilst attempting to identify a need, one should simultaneously develop the proposition that would meet that need. (Retailers, who sell fast food, are unlikely to benefit from or be able to respond to customers’ need to be clothed and protected.)

 

We advocate a 3-step process

 

1.     Diagnose the             >>> PAIN

2.      Differentiate the       >>> CLAIM

3.      Demonstrate the      >>> GAIN

Example:

	PAIN	DIFFERENTIATED CLAIM
A wardrobe	Untidy house	Get organised – cheaper Look classy - quicker
A mobile phone	Losing touch	Get Connected – and look good

 

From this example you can see that the need (PAIN) is quite universal and applies to a whole market. The offer/ solution (CLAIM) is equally generic – so it must be differentiated.

I don’t want to belabour the point, but focussing on pain rather than some ‘benefit’ or ‘advantage’ is quite different from the way most people have been taught to sell. In our Sell$mart program we teach sales assistants to hone in on the ‘BUT REASON’. With that we mean for example:

• You want to buy a wedding present for a friend – BUT you don’t want to look stupid by buying the same
• You want to buy a new sofa – BUT it must fit; i.e. must not make the rest of the furniture look old
• You want to buy a new blouse, BUT it must make the bust look slimmer

The reasons which are listed after the ‘BUT’ are examples of Omega factors – those negative ‘pain’ factors which are stronger motivations than simply wanting to look good or save money,.

Demonstrating the GAIN is the subject of another blog on Persuasion (to follow).

Have fun

Dennis

 PS: For something fun - click here.

 

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I wrote on part one (previous blog) about price and my sentiments can be summarised by the statement that price is what you pay and value is what you get. Retailers would do well to focus on the ‘value’ and not on the price. Of course the value is delivered with a product (or service) which meets a need/ solves a problem for a customer.
Communicating the value to a customer (as opposed to the price) starts with an idea – but the idea must be built on (related to) the core product.

Before you can start communicating about your product, you have to understand what your product really is; i.e. what is the customer buying? Let’s consider some examples:
What is the core product?

• You are not selling lipstick, but…sex appeal.
• You are not selling a house, but…home.
• You are not selling a book, but…stories.
• You are not selling an MBA, but…career success.
• You are not selling a drill, but…a hole in the wall

Let’s see how you go: What do you YOU sell if:

• You are not selling a watch, but…
• You are not selling a video, but
• You are not selling a MP3 player, but…
• You are not selling a pair of jeans, but…
• You are not selling a headache tablet, but
• You are not selling a wheelchair, but…

(Feel free to use the comments section below if you want to have a go.  Or if you want to share how you view your own products.)

Once you know what you are selling, you need a creative idea to communicate what that is.

• Always begin with a good idea.
• A bad idea, executed brilliantly is just as ineffective as a good idea executed badly – but at least the good idea has an opportunity to be executed well.
• When generating the idea – don’t worry about the execution.
• Allow the free flow of ideas (brainstorming).
• The best ideas are obvious (if not simple) in hindsight: ‘I wish I‘d thought of that.’

Next time we will look at how customers make the purchase decision.

Have fun
(PS: The ad below for a bookshop has a great creative idea - don't you think?)

Dennis

Retail advertising is the poor cousin of marketing – and for good reason: most of the time it is bereft of good ideas, breaks the most basic tenets of good marketing and to top it all, is executed poorly. At the risk of offending someone important; I will defy any reader to distinguish between Harvey Norman and Domayne advertising (as a 'for instance' – there are many more examples) if you removed the logo from the ad.

 

Retail advertising is mostly about selling the price. That is of course ridiculous. It should be about selling the offer.

 

What is the offer?

Offer = Product + Price.

Retail advertising is about communicating the offer (effectively) to your target market.

 

In order to understand good retail advertising, we need to understand a few basic aspect of (good) marketing:

 

• What role does price play?
• The fundamentals of picking the price to advertise.
• What is the product? (And is not what you think.)
• How does the customer make the purchase decision?
• How do you persuade them that your offer is the best?
• How do you get that message across?
• Who do you get it across to?

 

Over the coming weeks, I will run a series on each of the bullet points above to try and piece it all together at my business blog. Jon (at Simplicity Sells) is probably better positioned to give you an advertising professional’s take on these things, but not being the most qualified at something has never stopped me before, so why start now?

 

As a starting point, let’s quickly look at the role of ‘PRICE’ in advertising. (As in dollars – not me.)

 

Should the emphasis always be on price? When should the emphasis be on price?

 

Not counting specific, strategic clearances at very specific times, the only retailer that should be advertising price… is the price leader. There can only be one, and you should think carefully about whether it is you – or indeed whether you want to be the price leader. (There are a few exceptions: supermarkets and ‘grudge purchases’ for instance) but this piece is about specialty retailers who always resort to price.)

 

I will give you one piece of proof – and it is that bad that I won’t name & shame the retailers. One is a leading jewellery retailer who routinely advertises Gold Earrings for $1. I am yet to see a line queuing up for that particular bargain. A fashion retailer regularly advertises tops for $1.99 (everything must go) and it is not Lowes or Big W. And rarely do I see more customers in that store than the full-price store right next door.

(I can also attest that most  'critical' retailers that I consulkt with are pricing themselves broke.)

 

Cheap prices are the easy way – not necessarily the right way.

From a consumer psychology perspective, pricing ‘at the market’ is all that is required. (People don’t necessarily want the cheapest; they just don’t want to feel ripped off.)

 

Over at Ganador’s blog I continue the series – and the topic is ‘Pick Smart’. (A short one.)

There will be a new post every week, and the next one will look at WHAT customer’s really buy.

 

Have fun

Dennis

 

As a public service announcement – for those who are too afraid to ask, and those who may not be doing so already; a piece of advice that will add to your own productivity:

Subscribe to your favourite blogs (including any or all of these on Inside Retailing) by using a Blog Reader.

I use Google Reader which can be found here. (You need to have a Google Account, which is free and easy to set up.)

Then every time you find a blog you like, just hit the orange RSS button and it automatically takes you to your reader, where you can subscribe with one click.

For instructions, go here.

Every time that blog updates, it comes up as an ‘unread’ post in your reader – just like email.

No more bookmarks, no more remembering to check it out.

Scenario:

A couple wonders into the store and they show an interest in the new top-loader. They show all the buying signals – touching the merchandise, reading the labels. The sales person approaches:

 

The sale:

SP:  'Good morning folks, I see you are looking at the XYZ model, but unfortunately it is so popular, we just sold the last one to another customer. I don’t think we will be getting any more…'

Customer: 'Really? Oh no…'

SP: 'Yes they are very popular because they use so little water – and there is the $150 rebate from Government that goes with it.'

C: 'You sure you don’t have any more – maybe in another branch?'

SP: 'I don’t think so, but I’d be happy to go and have a look out back. If do have one, would you be willing to take it straight away?'

C: 'Yeah sure.'

SP: 'I’ll be right back.'

[SP leaves the showroom temporarily, only to return beaming from ear to ear.]

SP: 'Good news folks, we happen to have one just like that. How would you like to pay for it?'

 

Evaluation:

This sales person knew how to apply the Scarcity Principle in the sales situation. Not only did he induce ‘scarcity’ by claiming it was the last one, he made sure that the customers knew that there is a lot of competition for this ‘scarce’ item. (This is a necessary prerequisite as scarcity in and of itself is not sufficient.)

 

The only problem is of course that he was misleading the customer and if that did not get him (and his employer) in trouble; at the very least it is an example of bad service that is bound to be caught out sooner or later. It is also not a very good way of building customer relations and getting repeat business, because by the time they get home, the couple will suspect (if not know outright) that they have been conned. They might not talk about – for fear of feeling stupid – but they just won’t come back.

 

Like the other 5 principles of selling, this principle (of scarcity) is powerful, but sales people who have developed these skills intuitively and don’t know how to correctly apply it, are dangerous to the health of your business.

 

Proper (retail) sales training is of course the answer: not only to turn the average performers into stars, but to properly channel those ‘good’ (but dangerous) sales people who may have acquired these principles intuitively, instead of having been taught the right way.

Have fun

Dennis

PS: Last week's post was linked to an article about laptop security. Read the 'Secret of Free Advertising' here, or elsewhere on this blog) if you are interested.