Running Too Many Sales Could Cost You Money

The Case Of Too Many Sales. There was a men's clothing store near where I worked in New York City that had too many sales. Its was in the 1970's. Every weekend they had a HUGE SALE OF ALL SALES. On Monday, the prices were back to normal. I had seen numerous shirts, sweaters, and jackets as I passed by walking to lunch. Sometimes, I even wrote down the style numbers of some items...but I never bought. Why? Simple. Because I commuted one and one-half hours to work by train and I never, even for 40% off, could muster the resolve to take that trip on the weekend.
How running too many "Sales" can cost your business time, money and opportunity
"This week and this week only…”, “Our Fantastic Everything’s On Sale Sale”, “Preseason Savings Time”. If your business relies on running sales, I have some intriguing and thought-provoking questions to ask you about your marketing strategy.
Many businesses judge the effect of a sale by their sales during that period.
Here’s Question #1. Do you know how a sale affects your revenues in the periods preceding and following your sales?
Oftentimes, business owners and managers do not realize that, although a sale will bring in more customers (and decrease margins) it can also negatively impact the weeks just prior to and just after the sale. Why? Because customers who have been informed by your advertising to expect the sale, put off their buying until the sale. And those that were intending to buy a bit later, move their buying up to take advantage of lower prices.
Running Too Many Sales Could Be Costing You Money
Many of your Sale customers are, in actuality, (1) your regular customers who reschedule their buying to coincide with your sales events, or (2) bargain hunters who chase the “coupon” and are uniformly without loyalty. I had a client in the auto repair business advertised a $9 oil change service. After a year he realized that less than 8% of the oil change "couponers" returned for other service.
If your sales chart is made up of “Peaks and Valleys” as is true for the majority of businesses where sales are standard operating procedure, you’re simply rescheduling your income. When you train your customers to expect and wait for Sales, you trade a steady, predictable sales pattern for one of extreme highs and lows without appreciably changing the end results.
Are You A “Sale-Addicted” Business?
Question #2. Did you ever wonder what would happen if you did not run frequent sales? Would you save time and money in staffing? Might you save time you now spend gearing up for “special marketing promotions”? Would you be able to spend more time on making your business the best of it’s kind? Maybe you could expend the saved effort on new and better ways to engender customer loyalty—all of which pay far better in the long run?
Having Fewer Sales Can Create Other Opportunities
And finally, Question #3. What could you do with the money you spend on Sale advertising if you significantly cut the amount of Sales you run? Couldn’t you spend that money on advertising geared to differentiate you from your competitors and educate your customers as to why they should be doing business with you—regardless of price?
Remember, when buyers compare you with competitors and cannot sense any real differences that would benefit them, they revert to making their choice on price. Thus, many companies that can’t differentiate their product or prove their value, rely on Sales.
Perhaps the time has come to re-evaluate how you want to build your business—on the papier-mâché of “Sales” or on the hard steel of Value?
Think it over.
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