Five action points for an effective short-term sales drive
In the last quarter of the year, many retailers start to make the final dash to reach their year-end sales targets, relying largely on the efforts of sales departments that are already stretched to capacity by the forthcoming holiday shopping season. But there are some simple ways to boost year-end sales, as detailed here by Peter Oxley, CEO of RewardStream.
The advent of new marketing technologies that can produce promotional programmes within shorter timeframes is changing the way companies face the traditional year-end sales drive, Oxley says. Marketing professionals now have the tools they need to help their sales and channel counterparts give a short-term sales boost at year-end.
Although many of RewardStream's clients have long-term marketing programmes in place, they are also beginning to leverage technology to quickly launch short-term promotions that drive sales at key times of the year such as year-end and end-of-quarter pushes.
Five action points From his real-world experience, Oxley recommends five key action points that can help companies bring about short-term sales growth:
- Don't just target your best customers This seems radical at first glance. But too many companies focus on their best customers for additional growth. The problem is that these best customers often have little room for additional spending. There is definite logic to this argument: if they are truly your best customers, it is quite likely that you are already at (or near) the upper limit of the patronage they can afford to give you.
Instead, you should try to find the lucrative second tier of 'high potential customers' - those who do business with you but are not giving you their whole budget. For example, with year-end closing in, the often overlooked SMB market may be ripe for B2B sales opportunities (as their flatter hierarchical structure means faster decision-making and a shorter sales cycle).
The challenge with this type of strategy is that marketing departments need a technology backbone to support segmentation and to run promotions from. As professional marketers we understand what is needed, but the reality is that our company's resources can't always provide us with the tools for execution. In this case, leverage tools that help you build solutions and be prepared to look outside of your internal IT departments if securing IT time is an issue.
- Resist the pricing 'death spiral' The stress of year-end and quarter-end targets often leads companies down the road of reactionary price and profit margin reductions. The problem with this is that once a customer is accustomed to a price it becomes highly unlikely they will pay more for that item at any other time, even if the lower price is said to be 'short-term' or 'limited-time'.
In fact, companies unknowingly stall their sales cycles and train their customers to wait for sales in anticipation of quarter-end and year-end activity. Instead, incorporate product bundles to keep margins and revenue per transaction high. Use the law of averages giving your customers discounts on the whole, but doing so over a range of products so that profitability is maintained across the bundle.
- Leverage all company resources for sales Coordinate an attack on the market using all the different resources your company can gather together. This means not just leaving it to the internal sales team to handle the pressure on short-term promotions but also involving the third-party channel, marketing, and customer care, and even turning your current customers into company evangelists wherever possible. Technology tools that share responsibilities, as well as reward sales and referral behaviours, can be used to help spike sales.
For example, by implementing a Reward programme that rewards call centre representatives with merchandise or points each time they upgrade a customer or turn a call into a referral, a company can quickly and effectively broaden its opportunities for sales. In fact, such sales opportunities frequently prove more profitable as they are often based on higher-margin managed services that augment existing products. Incentivising current customers brings into play another sales force that many companies don't realise they have: the customers themselves. One example of this is the growing popularity of reward-for-referral programmes.
- Strategically use your indirect channel Most companies have established strategic goals that they share with their third-party channel partners and VARs (value-added resellers). However, these goals are often pushed aside when short-term sales boosts are needed. The result is often random or across-the-board discounting within the channel to ensure short-term sales targets are met.
But this need not be the case: By implementing channel programmes that provide near-real-time reporting, data feedback and partner segmentation, companies can quickly adjust the channel mix and still keep profitability and long-term channel objectives intact. RewardStream's clients, for example, use the company's technology platform to reward the channel based on product SKUs. When a sales push is on, clients can add promotional bonus bundles to these longer-term incentives within a business day. Feedback within the system is designed to be instantaneous, so channel managers know within a few business days if the bundles are providing the additional lift needed, and they can adjust the programme or roll it out to more channel segments if necessary.
- Change is often a good thing Be willing to fine-tune or change promotional programmes if they are not providing the results you expected. By using new technologies, consumer promotional and channel programmes can deliver measurable results much faster. Marketing professionals can harness this speed and ability to measure by constantly re-evaluating their data and taking the necessary actions.
In other words, new marketing technologies that can quickly produce promotional programmes can offer a real competitive advantage when it's needed the most. At the heart of a successful short-term sales drive should always be the science of measurement, and effective customer segmentation.
Through its LifeCycle Marketing Platform, RewardStream specialises in the deployment and optimisation of rewards-based marketing programmes that motivate consumer and sales channel behaviour. Peter Oxley has designed, launched and managed B2B and B2C loyalty programmes in the financial services, telecommunication, retail, travel, and hospitality industries.