High Impact Sales  

High Impact Promotional Sales can do many positive things for your business. Promotional Sale can create cash flow, move old inventory, give great customer perception about your Small Business, create space and increased your sales and profitability long-term. The key to having a high impact promotional sale is to be priced right and to create curiosity and excitement. First, it is best for customers to know the exact price of the merchandise. The easiest way is to have price charts showing the regular price and sale price. Pricing Charts will result in reduce labor costs and time getting ready for the sale. Here a few tips for a high impact promotional sale.

The best time to run is before one of your peak periods. For example, you can have a sale in November until Thanksgiving. You should have the high impact sale for at least 3 weeks and 4 or 5 could be better depending how much old inventory you have. You should have at least one high impact sale a year, but may want to consider 2 per year. This is addition to any regular sales in your Small Business. Make sure you give the promotional sale a name.

Everything on the small business should be on sale. If you are at keystone, the minimum discount should be 12% off. I suggest 12% instead of 10% because most customers will not know the discount amount of 12 % thus the perception of higher discounts. Here is a suggested breakdown of ad prices:

12-14% off – Should be about 40 % of the small business

20% off – Should be about 50 % of the small business

50% off – Should be about 10% of the small business

Your best-sellers should be 12-14% off. You should run 2-3 items for added discounts during the promotion for one week at a time. Normally, I would take some of the 12-20% off items and run them half off. One of the biggest mistakes is running poor selling items. You must run good selling items to get the customers into the small business. By running good items will lead to increase sales, profitability, selling more old and slow moving items. Many customers coming in the small business will buy higher gross items than the featured sale items.

Normally, taking discounts of 30-40% do not produce more in sales. That is why; the discounts go from 20-50% off. If you make signs, studies have shown that ½ off sells better than 50% off. If you had some old items or slightly damaged, you might want to consider 75% off regular retail. Most likely, you will be losing money, but the benefit is turning dead inventory to cash. With this cash, you can buy better selling items. The key to running a Small Business is turning the merchandise.

Do not play games with pricing. Some owners get greedy and for a few dollars ruin the effect of the sale by trying to make up the discounts during the sale. For example, they were selling an item for $10, now they reordered the product and changed the regular price to $12 for the sale. I was going to say raising prices is not a wise move, but that would not be accurate. It is just stupid and if one customer knows it was priced $10 before the sale, the entire promotional sale will be ruined. Do not use the excuse the cost went up because the customer will not believe you and will tell others that your promotional sale is bogus and the reputation of the business will be harmed. By the way, I catch this going on at least half of my promotional sales. Sometimes, it is the employees in the small business doing it thinking they are helpful. It is most common in the small businesses that have the most problems.

If your products have a lower gross margin than keystone, you need to makes some adjustments to the discount amounts, but try to have most of your items still at 20% off. You may want to use a lower discount, but if you dilute it too much, the promotional sale will not be effective. Too many Small Business owners are concerned with gross profit percents than gross profit dollars. The purpose of having this sale before a peak period is to gain new customers for your peak period.

What is the best time to start this sale? I would say for most small businesses, it is Wednesday. Many small businesses can use Monday & Tuesday to get ready. I would use Monday to make merchandising changes for the sale. I would close a few hours earlier on Tuesday to put up the pricing charts. There should be plenty so the customers will know the price easily. Trying to get pricing charts up the morning before the sale starts or after closing regular hours the night before is a mistake. Most small businesses will need a while to get the charts up.

Make sure you signed anything that is marked half off and would be wise to have a display of half off items right near the entrance. You want the customer’s to get a perception of favorable pricing. Do not put signs on merchandise that is 12% off unless, it is a high ticket item showing regular and sale price.

How do you advertise this sale? I would either have a banner in front of your small business or several signs that say ”Everything on Sale”. You would be able to reuse these for future sales also. Colors such as Hot Pink are noticed at great distances away and drive curiosity. If you are looking for a more professional sign, try yellow with black text.  The more the windows are covered; it will give the impression to the shoppers that you are more desperate to sell your merchandise.

You could place an ad in the local paper Wednesday and have radio advertising Wednesday also. Send a direct mailing to your small business mailing list on Saturday.  Tell your customers everything is on sale for a limited time and when the sale starts. It would be cheaper to use post cards for your direct mail message. Some small businesses should consider using door hanger advertising to get their message out at a good price.

Door hangers are less expensive and more effective  than traditional marketing / advertising. The response is often better than direct mail. Door Hangers are a small business’s billboard on the front door of the customer.

If you are using door hangers or direct mail make sure you mentioned free prizes to be given away. You should give 2-4 $25 Gift Certificates away as the free prizes. Have customers give their mailing address to add to your mailing list.

Pricing and special events will help the small business’s sales during a promotional event. It will create excitement and make for a positive shopping experience. Many special events can be done at a low or no cost and a minimum amount of labor.

Moving things around weekly in the front plus any end caps will make the small business look like it continually has fresh merchandise. Ordering new merchandise weekly will also keep the customers coming back.