When you’re new to the entrepreneurship world, you’re excited to get out there and do everything that you can to promote your business. One way of doing that is through sales and coupons that might attract new customers into your store or onto your website. If you’ve never run a sale before, however, you might not realize some of the hidden dangers that lie in such a promotion and, if you’re not careful, you may end up losing money on the promotion as opposed to making it. This week I’ll give you a few tips to help you make sure your first sale or coupon promotion is a success.
Firstly, you have to be clear before you run your sale what your goals are with the promotion. Do you want to reward the loyal customers you already have? Do you want a surge a new customers for a quick burst of cash inflow? Do you want to find new customers but keep them for the long term? Do you just want to get your name out there in general so that you can help build a bit more awareness about the fact that you exist? It doesn’t really matter all that much what your reason for running a sale is, but you need to know your goals before you do so so that you can design the sale in such a way as to make sure that those goals are achieved.
For example, if you want to reward loyal customers you already have, you shouldn’t promote your sale to everyone but instead should offer a coupon only to those people on your email list or who have made a purchase in the last month. If you want to generate a quick burst of cash flow and don’t care if the customers come back, you can discount far more heavily than if you want these new buyers to come back when you don’t have a sale.
This leads us to the second point: once you know your goals with the sale, you have to identify the target customer for this specific promotion. As I started to explain a second ago, if you want nothing more than a quick influx of cash then you’ll be targeting any bargain hunter out there with a great deal that still allows you to make some money on the volume of sales you’ll get right now. If, however, you’re trying to generate long-term customers then your sale will need to target the type of people that are your ideal customers and will likely come back once they’ve seen what you have to offer, but they need a little extra push to come check you out that first time and the sale can be just that. In this case, you wouldn’t want your sale to be too far off from what you’d normally offer because you wouldn’t want to attract the customers that are simply sale chasers.
In addition to making sure the deal you offer makes sense for attracting the type of customer you’re looking for, be sure that you cover your butt and are incredibly clear about what the restrictions are. If you say customers can use a coupon to get $20 off any purchase of $50 or more, make sure the coupon says only one may be used per customer or you’ll have people coming in arguing they should get their entire purchase for free because they have 3 coupons. Also make sure to note that your promotions cannot be combined with any other sales and that the deal is good only for certain dates. You don’t want someone coming in and using last year’s Valentine’s Day sales coupon AND this year’s Valentine’s Day sales coupon on top of each other.
Finally, it seems ridiculously obvious, but make sure that whatever deal you offer will still allow you to make money. You’d be amazed at how many entrepreneurs out there don’t actually know what their cost of sales is for any given item, which makes it basically impossible to know if you can still make money on it after a 25% discount. Having lower margins in the short term to generate more volume or more long-term business is fine. Not doing the math and accidentally selling things at a loss is not.
Once you’ve made sure you know why you’re running a promo, who you’re promoting to, and have all your coupon Is dotted and Ts crossed, you’re ready to get out there and promote your sale. Just remember to track the performance of any discounts or coupons you offer so that you can analyze the success of your sale once you’re done and be able to make an informed decision about whether it’s a worthwhile promotion to repeat or not.
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