Why you should you use sales promotions when all your customers tell you they just want a price and they hate the ‘phone the manager thing’. The subject we will talk about is as follows:
. Why use promotions
. Different types of promotions.
. Using promotions to close.
Why use Promotions
20% off, up to 50% off, Buy one get one free, up to £3000 off scrappage scheme. You see them everywhere. These headline promotions are not to get a sale they are there to get people through the door or book an appointment. Repeat, they are not to get you sales.
Yet when you go into a customer’s house and you bring up promotions, the customers say they just want a price. So why do we use them? What we must remember is that we should not listen to what people say, but watch what people do. When your friend or partner tells you they have bought a product, do they say how much they paid - or do they say the percentage off?
Most people tell you about the percentage off. Why is this? The reason is that it’s their reason to buy.
If you put 1000 people in a room and ask them who is looking to buy a car, on average 3% of them will put their hands up. These people are in the market to buy a car now. They need a car now, for whatever reason. Promotions are probably not going to encourage them much to buy a car. Ask the same 1000 people who are thinking about buying a car, and 6% of them will put up their hands. Now, these people will use promotions to justify making a purchase. What that means is the promotions are there to attract the 6%. It’s a much bigger market.
Different types of promotions
All promotions, if they are going to work well, need to be time-sensitive. The promotion itself must be relevant to your customer avatar. As an example, a customer who wants to buy lots of windows is more likely to buy more windows if there is a quantity discount. A customer that is looking to buy a conservatory is more likely to be attracted to a time-sensitive offer to a free upgrade to solar reflective glass. Your job is to influence and build rapport with the customer. Making the promotion time-sensitive gives them a reason to buy.
The real issue with any promotions is that it must be believable. Let’s look at a good example. In the UK the government launched a scrappage scheme during the recession. You could get up to £2000 off your car to reduce the price of a new car. This was done as the UK, like the rest of the world at the time, was in a deep recession. They needed to get people to start spending money. The offer went ballistic. For those people just thinking of buying a new car it was all the justification they needed to buy. The crazy thing about this offer was that you have always been able to part-ex your car. But it worked because it was believable at the time.
Let us use the same promotion in a different environment. The window industry is currently using a scrappage scheme promotion. Get up to £3000 off in exchange for existing broken-down windows. It’s a good offer to get people through the door. It’s defiantly going to generate appointments. But does it work for all customers? If that customer still has wood windows are they still going to get 3k in exchange for recycling their windows? If you walk into a new build and there are no windows to recycle, how do you justify the promotion? How do you make this promotion time-sensitive so that the 6% will buy? It’s not a bad promotion, it just does not work in all circumstances for this industry.
Using promotions to close
Always bring out your promotions at the beginning of an appointment, I recommend just after setting the agenda. Ask the question “Do you know what promotions we have on at the moment?”. Use a discount memo to show the promotion, or even better show it on your website. The reason you want to do this at the beginning of the appointment is you want the customer to be thinking about the offer through the sales appointment.
When presenting the price, clearly show the discounts and how they work. For example:
List Price £10000
Quantity 20% -£2000
Sub Total £8000
Time-sensitive promotion 5%[G8] -£400
Total Cost £7600 inc vat
I understand some of you will be reluctant to take my advice. You think to yourself “I would not like to be treated this way.” If you are not looking to buy a product then you probably think it is madness. But think back to a time when you did want to buy a car, kitchen, bathroom, windows and doors, diamond-encrusted cat collar etc. What initially attracted you? If that is not enough, test it for yourself. Do 10 appointments without promotions and 10 promotions with.
See how many you sell on the day vs going back. You might sell just as many but going back to do the paperwork means you could be sitting more appointments.
What promotions work well for you? Let me know below.