Managing Promotional Offers and Finding the Equilibrium
Segment out responders to your promotional offers and hit them up frequently with more offers. Consider setting up a separate stream of emails to buyers right after they've made a purchase. It's an old truth in direct marketing that customers are happiest with you right after they've purchased. This is the best time to ask them to buy again.
Should each catalog have an offer? If you’ve trained your customers to expect frequent offers, response could suffer if you send them a catalog without an offer.
Do you run the same risk with behaviorally targeted ads? Probably much less so. These ads are targeting your website visitors, which is a mix of customers and prospects. The ads are being broadcast to a different segment of consumers. Test online ads with and without an offer.
What about giving offers to your entire email list? How can you limit the risk? One tactic is to send strong offers to customers who haven't made a purchase in over a year. These buyers are essentially dormant, so it can be worth your while to reactivate them using a strong email offer.
Here are some rules to consider to help manage your cross-channel promotional offers:
- Don’t favor one channel over another (e.g., stronger offers via email than in your catalog).
- Limit how deeply you discount. It’s better to run shallow discounts frequently than deeper discounts infrequently.
- Segment out those customers who have responded to your promotional offers. Consider increasing the frequency of offers to those buyers and sending fewer discounts to those buyers who have never used a promotional offer.
- Use promotional offers via email or catalog to reactivate customers who haven’t bought from you in a while.
- Know that when you send shopping cart abandonment emails that consumers are expecting a promotional offer.
- Test constantly. Test the difference between deep offers and smaller discounts for catalog, email and online ads.
If you're selling commodity-branded merchandise, know the street price of the items you're selling and be very careful about selling either above or below the established street price for an item. If your price is above, you won’t sell much. If your price is below the established market price, you may get pushback from your manufacturers.