If you are always having a sale, then you’re never really having a sale
In the U.S., fireworks always show up on July 4th. They sometimes show up on New Year’s Eve. They occasionally appear after a home team home run. I think fireworks are pretty cool. If they’re so nifty and always gather a crowd, why don’t we have fireworks every day?
That should be an easy one to answer:
- That would be astoundingly annoying
- Fireworks would stop being special
- Your dog would pack his bags and move to Peru.
When you have a sale at your business, treat it like you’re handling fireworks. Keep it rare, and have a good reason to blow them off.
“But, people love savin’ money. Whenever I have a sale, it always gathers a crowd!”
If you are always having a sale, then you’re never really having a sale (I’m looking at you J.C. Penny, Kohls, and every car dealer always). The reason to have a sale is to motivate people who are shopping for your product right now to consider you. The other reason is to nudge people who are maybe shopping to act today.
But, am I really nudged to buy a refrigerator this week when it will certainly be on sale next week? You already answered this question when I asked you about fireworks. See rule #2. Do you think I’m dense enough to believe that “prices have never been lower,” and “offer ends at midnight?” See rule #1.
Retailers should have sales. There’s nothing wrong with a good ol’ barnstormin’ sale. But, like fireworks, your sale will only work if you have a legitimate reason and it’s rare.
- Be very specific in your offer. “All men’s sweaters are $30 this Saturday,” is much clearer than “everything is 15% off all August.”
- Make sure there’s really a reason for your sale. “Back to school” makes good sense for school supplies. “Back to school” isn’t a reason to tune up your air conditioner.
- Go big or just don’t. I’m not going to the park to watch a kid play with sparklers. Your sale must be bold and really a sale.
- Make it rare. Instead of offering a pretend $100 discount on a TV every month, why not stack it up and offer $600 off twice a year? That gets my attention, and just might move me to action if I believe it’s not going to happen again for another 6 months.
Sales come with risks (I’m told people like lists, so here’s another):
- Sales cut into your profits.
- Sales reduce your product to a commodity. If price is the only thing special about it, I may buy it from you today, then buy it from the place across the street tomorrow. Because, who cares?
- Sales are only for the “now” customer. If I don’t need a mattress now, your ad doesn’t apply to me. You miss the opportunity to tell me why you’re special so I remember you when I do need a mattress. The number of people who need a mattress now is small. The number who will need one someday is… well, everybody.
“Sales promotions are a notoriously stupid thing to do and […] are something that should be resisted wherever possible.
Yes, they shift a lot of stock and also help provide short-term differentiation for your brand over the competition. But that short-term sales bump comes with a much greater hangover as even the smallest cut in price causes financial disaster to bottom line profitability.”
Ritson goes on to say that the only way to compensate for the loss of profit and brand identity “can only be resolved with… you guessed it…another sales promotion.”
Slow and steady, my little tortoise. Do it fast and all you get are prefabricated homes in Levittown. Take your time and you can build a cathedral.