Increase Your Sales with Value Added Offer
Powerful offers give customers a reason to buy ‘now’. They do that by offering the customer a massive amount of extra value if they purchase before a certain date. These offers can take the form of discounts, freebies with purchase, free trials and guarantees and a combination of each or all of these. Wherever you look you’ll find the most common offer is a % off discount. Discount sales can and do work very well but they’re also the most destructive to the profitability of a business.
Instead of discounting, can you bonus in another product or service? So, instead of offering a $30 discount, can you bonus in a product that has a perceived value of $30 but a hard cost of just $5? When you do that, the customer is happy because they’re received a great deal, and it has only shaved $5 instead of $30 off your profits.
ONE: Understand How Profitable Each Sale is if You Have a Value-Added Offer
When thinking about what to offer, make sure it’s something that people aren’t going to ordinarily purchase and pay full price for anyway. For instance, if most people only buy one handbag at your store, offering the third one free could be a great idea (depending on your margins, of course).
But if it’s buy one pair of pantyhose and get a second free, there is a much greater change that a shopper would ordinarily purchase two pairs of pantyhose anyway so the retailed ends up needlessly doing themselves out of sales.
Back to the handbag example; instead of paying $70 for a handbag and receiving $70 worth of handbag, they could spend $140 and receive $210 worth of handbags which puts $70 back into your pocket. Now let’s say the hard cost of those handbags is $25. Cost of Goods for that sale was $75 yet the sales figure was $140 so you have made $65 margin on hat sale instead of $45 if they had purchased one bag. You’re $20 in front of each sale.
TWO: Be Selective About Which Products You Make The Offer On
Naturally, if you were to offer a “buy one get one free” deal on certain handbags that are already popular, you’re not doing yourself any favours because you’re needlessly giving away merchandise when people would have ordinarily bought the product without the add-on.
Instead, if you are going to offer a “buy one get one free” offer, make it on products that aren’t big sellers. Perhaps you have some hard-to-move stock that has been gathering dust on your shelves forever. Or maybe you made an ordering mistake on a shipment and you ended up with way too many of a certain line and you really want to clear them to make way for a new line.
Before you formulate an offer, it’s very important to know what outcomes you want to achieve. Why is it that you want to make an offer anyway? Is it because you want to increase revenue? Is it because you want to clear out certain items? Is it because you want to introduce people to a new product range? Naturally, knowing the answer to this question will then have a large bearing on tthe type of offer that you promote.