The balance between branding and sales activation has been well researched and documented by Les Binet and Peter Field. The decades-old war of whether long-term brand building is better than immediate sales was more or less ended with a truce: You need both. Brand building requires deliberate, diligent, dedication. The foundation of everything we do at Wizard of Ads® is brand-building because brand-building is quite literally the foundation of any marketing plan. But there are times when it’s appropriate (even necessary) to have a sale. And because these kinds of things always have some kind of mnemonic acronym, let’s look at the P. R. O. P. E. R way to advertise a sale. You should have a specific Price. Sales should have a **REASON.**Make a clear Offer on a Particular product. Give the sale an Expiration date. And you should make this a RARE event.
PRICE (be specific!)It’s as simple as the price was that, now it is this.
A specific price, or what I call an “anchor price,” is important. It gives the customer an anchor of understanding why this is a good deal. Saying “save 25% off double-hung windows” is meaningless unless I know how much a double-hung window costs. “But I don’t want to tell them the price…I want them to calllll me” Don’t give your customer homework. The reason you’re having a sale is to speed up the sale. Remove the roadblocks. “Be clear and specific: Windows are regularly $300, now just $225.”
Have a REASON
President’s Day or Labor Day isn’t a particularly good reason to buy a mattress. Granted, your competitors will likely be doing it…so one could argue that you need to be in that fight. But it IS a fight, and it’s not going to be pretty. Far better to have your OWN reason to put on a sale at a time you control. Spend time studying what others are doing and do SOMETHING ELSE. It should be something that’s meaningful to your customer. Just because it’s the “end of the month” and you’re trying to clear inventory isn’t your customer’s problem. Grand openings, a change of season, or your 10th anniversary could be legitimate reasons for a sale. But it should be your own thing, for your own customers, based on your own product.
A clear OFFER on a PARTICULAR product
Customers are in the market for a thing…not everything. “Save 25% storewide” is meaningless. You may as well say nothing at all. “All Goodyear Tires are $199” tells me exactly what’s on sale. If I’m shopping for tires, you have my attention. Again, no roadblocks. Don’t gunk this up with small print or exclusions.
The reason you’re having a sale is to speed up the sale. You’re going to have to put some urgency in there. One way is to give it an expiration date. Very soon. Your sale is not “all month long.” Your sale is this Wednesday only. You are talking to shoppers who are shopping now, and you’re trying to cut them off before they go someplace else. Another expiration tool is to “expire” the number of products you have. “We only have 14 Goodyear tires for $199, and when they’re gone, this sale is over.”
Like any special event…it’s only special if it’s infrequent. Major chains like Kohl’s or Best Buy have a sale every week, but that requires a business model based on high efficiency, high volume, and narrow margins. That’s something very difficult for local, owner/operated businesses to sustain. Twice a year…maybe once a quarter… is about as much as you can (and should) do. Fireworks are only fun a couple times a year. After that, it’s just noisy and obnoxious.
Know What You’re Getting Into
Having a sale comes with plenty of risks: You are communicating that price is the most important thing, thus relegating your product to a mere commodity. You’re telegraphing to the customer that it doesn’t really matter where they shop or what brand they choose…just get the lowest price. You become the gas station that’s always a penny cheaper. It’s a very expensive way to advertise. You have to spend an ocean of money to pull off a really good sales promotion just to rise above the noise of all the other sales promotions going on. It’s a profit hog. Having a sale means lowering prices, and that eats your profits.
Marketing professor Mark Ritson reminds us that, yes, sales promotions “shift a lot of stock and also help provide short-term differentiation for your brand over the competition. But that short-term sales bump comes with a much greater hangover as even the smallest cut in price causes financial disaster to bottom-line profitability.” You’ve sucked demand out of the marketplace, and you’re low on funds…so the only thing left to do is “…you guessed it…another sales promotion.” You do need some sales promotion, that much is true. Just be cautious and don’t make a habit of it…because it’s a hard habit to break.