Slashing Prices Won’t Win Customers Back, But Smart Promotions Will
Many retailers have lost customers and revenue over the past year due to the pandemic and are struggling to find ways to bring those customers back and regain the financial footing and market share they once had as a business.
While lower prices may seem like the right answer for attracting customers, one trap all retailers must avoid is simply slashing prices across the board. This will only hurt them financially at the end of the day. no matter how many customers the sales attract.
So what can retailers do to bring back their once loyal customers and attract new buyers?
The solution lies in strategically designed and placed promotions. Rather than discounting for the sake of discounting, retailers need to be able to identify what is important and valuable to their customers and design marketing strategies that focus on “Promotions of Value.”
[Related: Retaining the New Consumer Through the Power of Technology]
To do so, they need to ensure four critical elements are being taken care of, all of which would be covered by the right promotion management solution. These four elements are: complex offers, agility and flexibility, personalization, and power and scalability. Together these factors will contribute to the success of your business and build back customer loyalty
When it comes to promotions, two things are quite obvious: Customers want more promotions and retailers want to avoid giving away their margin as much as possible. But if promotions are needed to help build customer loyalty, what do you do then?
It all comes down to understanding what customers expect and then balancing that with the right offers. The right promotion management solution will be able to identify those opportunities and will capitalize on them through the right promotion.
For example, a retailer can setup a complex promotion requiring a specific customer type, with a minimum spend amount in a specific category, purchase one item from a list of items, and buy something from a specific vendor. This one promotion addresses multiple KPIs for the retailer while delivering real value to the customer.
To handle this, retailers need a promotion management solution that can adapt quickly to whatever change they may encounter — if they don’t, they will lose their customers to someone who can.
We continue to live in a retail age of personalized promotions and offers, as the amount of data available about customers has never been higher. Leveraging that data is key to providing the consumer experience expected by so many in today’s modern retail landscape. Simply put, give your customers what they want!
Retailers want the flexibility to choose what they want to trigger personalization experiences on, from “completing the look” type promotions, to action-based functions like email subscription signups.
Going even deeper, retailers need the ability to define promotions to a specific customer that can be triggered by a unique and secured identifier that only that customer can use. All this functionality and flexibility comes from the promotion engine and is a must-have in today’s ultra competitive retailer industry.
Power and Scalability
Although customers are making purchases on a variety of sales channels these days, one thing holds true no matter the channel they are using: Consumers will not wait for slow or unresponsive experiences. If your promotion management solution is not able to keep up and quickly process many promotions, offers, and coupons at checkout, customers will simply go looking for the next option and you will lose the sale and possibly even that customer for life.
Among all of this there remains one constant: The right promotion management solution is the one that can quickly adapt to any change. A rules-based promotion engine with the capability to handle any volume of transactions for all sales channels will deliver the right promotion strategy for any retailer.
Many factors can influence consumer behavior and retailers need to build promotions and offers that deliver what customers want. The top leaders in retail are ensuring their promotion management solution is “future proof” by being able to meet the challenges of today and any of the unknown challenges the future will throw down.
Dan Surtees is VP of strategy and business development at XCCommerce.