Why do promotions in the first place?
Promotions change customer behaviour and are the last step in any marketing campaign. Used well, they can change customer behaviour to your advantage and help you to improve your sales.
Within your customer groups, there will be different types of people, and promotions will motivate them differently. Some of your more casual customers won’t care, and a bargain will just top up their shop or get them to try something new. At the other end of the spectrum, more astute customers may only buy from your shop if they feel they are getting a deal somewhere in their basket.
Promotions can be summarised, therefore, as trying to:
- Attract new customers
- Increase basket sizes, and
- Make your customer come back more often.
But there are two more very important things I want to highlight about promotions:
VERY IMPORTANT THING NUMBER 1
Promotions give you something to talk to your customers about on a day to day, week to week, month to month basis. Filling and maintaining those conversations is key to keeping you at the forefront of your customers mind – don’t let them wander off. Promotions are not the only things you should be talking about, but they are the meat in the sandwich, the call to action, the worm on the hook.
VERY IMPORTANT THING NUMBER 2
Promotions reassure customers that YOU care about price. You are not there to just “pile it high and sell it expensive”. You are on the customers’ side. It changes the relationship from you taking money from them, to you being on their side against an expensive world. You are getting your customers the best price, a fair price, even a cheap price. When fine food shops focus solely on quality or taste they forget this.
Embedding these two messages in everything you do creates a culture in your shop that you are finding the best price for the best products for your customers. Very John Lewis. That will roll out through your merchandising, your social media, and your team to your customers. It will bring loyalty and sales to your shop.
Chapter 1: Types of Promotion
What are Promotions?
Promotions make people buy. More specifically, they attract potential customers to your shop, convert people to buy in your shop and retain customers to come back later to your shop.
Just about anything counts as a Promotion or a Promotional Event if you can put a splashy red sign about it and advertise it. It is about appearing to offer the customer extra value against the standard offer. A Sales Promotion is the subset of Promotions which have money off or discount value. Most people think of Sales Promotions first when trying to change customer behavior, so lets look at those first.
Here is a good list of some standard Sales Promotions:
|Promotions||What is it||An example|
|Money off the standard price||The most straight forward of all the promotions – money in £s off the standard price||£1 off every jar!|
|% off the standard price||Probably the most common sales promotions – a discount expressed as a % off the standard price||25% off!|
|Bundle buys/buy together/multi buy||This is where you get a discount if you buy a group of items together. Usually, the items are related||Buy one of our ceramic camembert bakers and get a Camembert de Normandie half price|
|Bulk buys||An incentive to buy in large quantities||Buy a case of wine and get a bottle free!|
|Family packs||A particular type of bulk buy designed to appeal to families. The pack is larger than average and suitable for a family and cheaper per kg or litre than a smaller pack. The word family pack forces the assumption into the buyer they are getting some sort of deal without explicitly saying what it is||Cheddar family pack 500g |
|Sale!||Another non-explicit promotion that suggests that something somewhere is being sold more cheaply than normal. Often the sale items are only a small section of the Store||Sale! End of season clearance. Large discounts!|
|BOGOFs/Two for ones||BOGOFs are well known as buy one and get one free. These kill margin for the retailers, so very often the retailer has got a substantial discount from the supplier to make the promotion viable||Buy one brownie and get one free|
|An extra freebie – could be a recipe or a free jute bag||This is either a straight-up bribe to buy the first product, and a promotion to get awareness for the second product.||A free hessian bag when you spend over £50; or buy over £20 of our beef and get a free jar of Horseradish.|
|Special packaging, such as seasonal or gift packaging||This promotion re-presents existing products in a way that adds extra value. There will often not be a price advantage, and it is not unusual for the specially packaged products to be more expensive.||Try our Chilli Week Hot Sauce collection! 3 Jars beautifully packaged for £9.99!|
|Money off a future purchase||A voucher is received that can be redeemed at a future (often time-limited) time. This is a very powerful Retain promotion, as the voucher can only be taken advantage of in a next visit.||Spend more than £50 this Christmas and receive a £5 voucher to spend in January|
|A future freebie with a purchase||The customer receives a voucher for a freebie that can only be redeemed at a future time||Buy your stilton from us this Christmas and get a free coffee for two vouchers to spend in January|
|Whole basket discounts||A discount on a whole basket for people who either have a voucher or fall within a specific group||5% off for all Senior citizens! Just show us your bus pass!|
|Staff discounts||Staff discounts are very common. They have great value in encouraging your team to try the foods they sell every day||5% staff discount 10% staff discount if you have been with us for over a year. 20% staff discount if you have been with us for over 5 years|
|Special prices for Loyalty club members||Use discounts to reward club members, get new members, introduce new lines and so much more. These are your best customers, make them evangelists for your icon products||Members discount this month! Our new Fruit Cheese from Global Harvest. 10% off for Loyalty cardholders|
Now here is a good list of some non-Sales Promotions:
|Promotions||What is it ||An example|
|Vouchers||Vouchers are pre-payments for future purchases usually given as gifts||Buy a £20 voucher for the cheese lover in your life this Father’s Day!|
|Hampers||Hampers are extremely popular and promotion of everything you sell all in themselves. Usually, you do not have to discount them, and you must include the costs of wrapping materials and time||Try our Mother’s Day Hamper! (PS you’ll still have to call her)|
|Tasters||Tasters should be available for something all day every day. They don’t need to be plated up, they can be served by a team member. The important thing is that tasters offer themselves, or are offered to, the customer||The Irish just beat the English in the 6 nations! Try Ireland’s best blue cheese Cashel Blue to celebrate|
|Good merchandising in Store||There is nothing like a good merchandising display to make people stop and stare. Merchandising is the most physical form of promotion||It’s Valentine’s! Look at our wonderful Valentine’s gift selection that is guaranteed to make your loved one love you more|
|Window Display||An extension of merchandising, windows are your best shop window to new customers and people out browsing. (It never ceased to amaze me the people who walked down my high street after hours looking in windows)||People make special pilgrimages every year to the Fenwicks’ Christmas window display|
|Rare, seasonal or specialist products||If you have products with limited availability, promote it. Rarity sells||Our own Gravadlax – buy it before it’s all gone. We only have 20 Montgomery baby cheddar’s this Christmas – order while stocks last|
|Tastings with the Producer||If you can get a Producer to come and do an inStore tasting, promote it. They know more about the product and are often very happy to come and sell to your customers. If you can get regular tastings into your Promotional Calendar your customers will begin to make special trips to be there as well||Tasting in Store this Saturday! Pete the Greek’s Houmous and Taramasalata. You won’t taste better outside Greece|
|A competition||Customers love a competition. They are very cheap to run, are brilliant on social media and can be focused on almost any goal||Loyalty Club Weekly Draw! This week’s prize: 300g of Gorgonzola and a packet of Peters Yard Biscuits. Check your number above the counter.|
|Specials: e.g. Guest Cheese of the week/Panini of the Day||Specials are used very widely to draw attention in advertising and are very effective online||Sign up to our Facebook page for our Soup and Panini of the Day notifications|
|Loyalty cards||Loyalty clubs are massively underused because Stores think they require a lot of admin. They can be done very simply and open up a highway of communication||Join our loyalty club and get invites to our Members’ events, special prices on best-selling lines, early-bird discounts and our extra special loyalty points scheme|
|Redeemed loyalty points||Make sure your club members redeem their loyalty points! It’s what binds them to you||Train all your team to ask of every customer if they want to redeem their loyalty points at checkout|
Chapter 2: Goals – What Promotions are for
Promotions are what the customer sees. They are common and will motivate customers, but let us look behind the curtain and ask what the shop gets out of it. When you structure your promotions (in your campaigns), knowing what your goal is is the key to good business.
Some typical goals:
- Increase sales (well of course…)
- Increase sales at slow periods – in January, between 10 and 12 in the morning (think happy hour)
- Increase your Gross Margin
- Get customer names, addresses and email addresses
- Get existing customers to bring their friends
- To build loyalty on a particular (unique to you?) product line
- Get customers who have never been in before to visit your Store
- Increase basket size
- Get the customer to try a new product
- Increase customer loyalty
- Increase the frequency of visits by customers
- Get Christmas customers to come in in January
- Appeal to older customers
- Appeal to younger customers
- Appeal to commuters, school mums, tourists – whichever group you think is the next big thing for your shop
- Pre-empt customers buying their port and cheese from Waitrose
- Remind your customer you are the best place to get the best products every week
- Dispel a “posh shop” image
Your goals shape your promotions.
You can now see that the promotion is the last step in any marketing campaign. Promotions change customer behaviour. Use them to change customer behaviour to meet your goals.
Chapter 3: Promotional Events
We need a structure to apply Promotions and the goals we want them to achieve. We call these Promotional Events. Promotions Events have become more and more important as food moves from being a, well, food, to becoming an experience.
Promotional Events are the tent pole events in your promotional calendar.
Seasonal events have the biggest and plannable catchment, making them easy to deliver and easy to get support from Suppliers for. Most importantly, there will be other businesses marketing seasonal events, so getting attention for your promotions won’t be such an uphill challenge.
Here is a summary of what we want to achieve from a seasonal promotion:
|Existing customers||New customers|
|Attract||Get new customers who are interested in the event to come to your shop|
|Convert||Increase basket sizes by offering an additional temporary offer||Get your new visitors to buy|
|Retain||Get your customers to come more often for your seasonal events||Get your new customers to return for other products or events|
For seasonal events, your target audience (new and existing customers) are going to buy from somewhere. Your job is to make them buy from you.
Types of Seasonal Promotions most used in Food & Drink retailing
|Convert||Increase your basket sizes by offering an additional temporary offer||Possible promotions: |
– Strong focused, well merchandised offer in Store
– Early bird offer
– Loyalty discount on limited lines
– Limited availability promotion on some lines
|Retain||Get your customers to come more often for your seasonal events||Possible promotions: |
– Promote on social media
– In-basket flyers
– Invite-only open evening(s)
– Limited period discounts
|Attract||Get new customers who are interested in the event to come to your shop||Possible promotions: |
– Social media advertising of new range
– Social media vouchers to redeem in
– Store Window display advertising
– A-frames in a different part of town with an event or discount incentive
|Convert||Get your new visitors to buy||Possible promotions: |
– Seasonal multi-buy
– Discounts/”Save”/Money off Tastings
|Retain||Get your new customers to return for other products or events||Possible promotions: |
– Voucher/discount in the month following your event
– Discount on a product if they join your loyalty club
What seasonal events and promotions are there?
There is no end to the number of seasonal holidays, but some are very much better than others. [In my experience], the ones that work best are the ones that have a strong existing following in your area, so it is less of an uphill battle to get people to pay attention to it.
Good seasonal events will deliver two things:
- A time for people to gather and share a meal. This is great for Fine Food Shops, as the people will often trade up to get the best things for their friends and family; AND
- Gifts. Food and food-related gifts are also great for building turnover.
Which Promotional Events should we be looking at?
Events come in four categories:
- Recognized holidays
- Cultural Events
- Lifestyle Events
Retail Seasons are different to the actual seasons i.e. Spring, Summer, Autumn, Winter. For most businesses’ seasons are focussed on the ebb and flow of their customers.
Here is the seasonal calendar I used to use:
|January to February||Spring term|
|March to mid-April||Easter|
|Mid-April to end of June||Summer term|
|July & August||Summer|
|September to mid-October||Winter|
|Mid October to December||Christmas|
Each season will have its own seasonal stock list with promotions scattered through it relating to seasonal stock lines.
Recognised holidays refer to national events which are calendar focused and not specific to a person or family. They may not actually involve a holiday. Christmas is the big one, Valentine’s Day, National Apple Day.
|CHRISTMAS||Yes, this is the big one. Christmas runs from at least Half-term to the end of the Christmas Holidays, about the 4th January. Worth about an extra month’s trading to most shops in December alone, often more. Good for gifts and food sales.|
|Easter||Not as big as Christmas, but still a good size. Good for gifts and food sales.|
|Halloween||A tricky one this – it kicks off the Christmas season and can be quite prone to having lots of stock left. It’s a season for children in the main, not adults and there is very little feasting involved. The best use of Halloween tends to be by Farm Shops, especially those that do Halloween related events.|
|Valentine’s Day||Opportunities for both gifting and meals, but appealing to a much smaller market.|
|Mother’s Day and Father’s Day||Opportunities for both gifting and meals.|
Cultural events are things like your local food festival, events linked to your community and the local area. These can be brilliant, with opportunities to put up stalls in extra locations and have double or even triple day sales. You may even wish to host your own events if you have the space to do so.
Get involved as they often offer real opportunities to reach parts of your community who don’t usually visit your establishment so that you can engage them with the quality of your products, and price value.
From vegans to chilli champions, BBQ fanatics to cheese lovers, book groups to bridge clubs, bicycle pelotons to charity walks, there are numerous communities out there for you to reach. You may even give talks to your local Women’s Institute, the church roof group or the Rotary Club.
These are windows into the consumer groups that are the bedrock of your role as an independent shopkeeper in your community. Giving discounts at events, or simply sponsoring or putting out flyers with promotions at these events can get long term customers every time.
Introducing an event into your shop will change customer behaviour. This will lead directly or indirectly to more customers, either buying or visiting more often. Let’s look at how you do it in practice.
Once you have a firm promotion in place, bank it for the following year. Next year, use your energy to add a new promotion in that period, confident you have one in the bag your team have the experience to make run smoothly and achieve your chosen outcomes.