Avoiding the seasonal price-drop frenzy with risk-free promotions

By Steve Gales, sales director at Opia

The start of the frenzied period of early Christmas discounting is upon us, with Sofa Sunday and Cyber Monday coming hot on the heels of Black Friday.

Yet, while shoppers were poised to bag a discount, there is little doubt that some retailers risk cannibalising their subsequent sales. Constant price-drops can erode so much margin they leave even the most successful business with no room for manoeuvre.

For their part, with restricted product availability influencing how many people are actually able to snap up headline offers, some disappointed consumers may end up feeling cheated if they head online or in-store looking for limited stock that has already gone.

This was borne out in the early hours of Black Friday when scuffles broke out in some large retail stores across the country.

Rather than lose the momentum initiated by this sales period or upset customers, a risk-managed sales promotion with guaranteed fulfilment can enable brands and retailers to engage shoppers long after the last seven days’ headline events. This means shoppers don’t miss out on limited stock and everyone gets a good deal.

From a fulfilment perspective, this means investing time and money in high-quality systems and customer engagement, ISO 9001 quality processes, staff training, quality assurance and ISO 27001 information security certification to make sure everything runs smoothly and consumers and clients benefit from the outcome.

It is all about building loyalty and securing repeat business. From the consumer’s point of view, it does not matter how good the deal is, they expect businesses to deliver on their promises.

Faced with the heightened expectations of today’s tech-savvy consumers, the secret to a successful sales promotion lies in a scientific, data-driven approach, forecasting likely outcomes and escalating promotions from short-term, low-value deals to bold and imaginative campaigns that deliver real returns. Increasingly, it is also about using longer term promotional mechanisms to keep shoppers coming back in an era when it is so easy to seek out the lowest prices with a smartphone.

A risk-managed promotion enables brands, retailers and promotions agencies to gain access to new types of promotional mechanism, opening the door to a scale of offer that their P&L would not otherwise be able to accommodate. Rather than risk a hefty bill at the end of the campaign, combining predictive analytics with specialist underwriting can guarantee that the promotion will not backfire or, worse still, leave the business out of pocket.

In fact, regardless of the value or type of deal on offer and the time of year, it is essential to make campaigns both client and customer-centric. From a business point of view, it has to achieve a pre-determined objective. For the target consumer, it has to deliver sufficient extra value to make them want to buy.

In short, to gain real ground and get ahead of the competition, compelling risk-managed sales promotions is where the smart money is going.

The bottom line is that, even at times when competition on price is fierce, a strategic approach to sales promotions can act as a lifeline to firms looking to differentiate themselves and establish longer-term customer relationships.

For further information, please visit www.opia-sp.com

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