Nomfundo Mphuthi has been leading marketing strategies for businesses and brands for over a decade, and is currently Chief Strategy Officer at Lyst, the fashion shopping app. She advises fashion brands on the platform on market and customer trends and helps inform their strategies, including Sales and pricing decisions. A subject on which she is an expert is Sales events.
In our Startup Life newsletter, we asked Nomfundo for their top tips for arranging a sale.
Know why you are functioning a sale
It will help you decide How? ‘Or’ What much to expect, for How? ‘Or’ What long and who to involve (depending on the size and structure of the business, this could be the marketing, pricing, fulfillment or merchandising teams). Here are a few reasons why you might consider one:
- If everyone in your industry is functioning a sale — for example the mass Sales events like Black Friday or New Year’s Day Sales – you may also want to stay competitive and make the most of busier online traffic. Consumers expect offers.
- You need to move stock that does not have sold this season so you can avoid increased storage costs or a logistical nightmare trying to get rid of extra stock. This is particularly relevant in the fashion industry and for products like phones and laptops that are regularly updated.
- Sales have been slow and you need to increase your cash flow.
- You have a new product and you want to attract customers to gauge their interest and get their feedback.
Don’t continue sale too early
During the mass Sales events, it is tempting to continue sale sooner than the rest of your industry, but if you do, you may not be able to ride the wave of collective consumer excitement. Likewise, if you need to move stock that does not have sold this season, wait until the end of the season or the start of the next one to get a discount – earlier can help Sales numbers, but you risk training customers not to pay full price.
Give the team enough notice to prepare: the marketing team needs time to get the message across; the execution team must be prepared for an increase Sales; and the customer service team must have enough people to handle the increase in incoming inquiries, returns, etc.
Don’t rely on Sales to achieve revenue goals
Current consumption is not at expected levels due to macroeconomic factors that put financial pressure on consumers. There are certainly bigger discounts in all industries. However, functioning frequent Sales is a risk to your company’s reputation and finances: it undermines your pricing strategy and the “full price” will not be perceived as worthy of its value. You won’t have regular recurring revenue because customers will wait for you to cut costs before buying. However it is tempting to continue sale for quick cash gain, your strategy should be explicit about when and How? ‘Or’ What often to be expected – then stick to it.
Ringfence products that can never be discounted
If you want something to be perceived as premium and desirable, never overlook it – it could be your flagship service, product or feature. It will also help regulate the value of the company’s other offerings as it provides a constant against which to measure up.
Target a specific audience
Cover Sales may not be the right option to achieve your goals. If your goal is to retain your customers, for example, you can reward them privately. Email them a discount, or Course exclusive or early access sale just for the biggest spenders. You can also target customers by Sales channel – for example, Instagram or Twitter ads with a discount code for new customers.
Weigh the green implications
- Sales encourage people to buy more. However, a sale could also prevent the stock from ending up in a landfill or being burned. Sales also give consumers choice.
- A more accessible price can encourage customers to take a risk on a new, sustainable business that doesn’t have the reputation or low prices (due to smaller-scale production) of larger, more established companies.
About… reducing your product
💸 Subscription models don’t have to offer free trials. There may be better ways to Gain someone’s trust of potential customers.
🤔 How to offer discounts as a B2B startup. In a competitive market, a financial incentive can help you stand out.
📚How do you offer volume discounts? Their goal is to get customers to buy more than they had originally planned.
🛒 Do you manage an e-commerce store? If that is the case, here’s how start a sale above.
🐝 Create buzz. Build hype, increase brand awareness and find new customers by running a flash sale.
Anisah Osman Britton is co-author of Sifted’s Startup Life newsletter, which appears weekly on Wednesdays. Register here.