Sales and discounts are a marketing strategy used by most companies when they want to increase sales. There are a variety of ways in which to reduce the original price of your products but perhaps, more significantly, it is important to recognize that there is science behind consumer psychology during the sales period. If you want to discover the best way to attract customers to your e-shop and increase profits during your promotional sales, read on.
How Sales Work
The sales period awakens a ‘now or never' approach in the consumer as the discount duration is limited. The consumer feels that if they don't buy the item of their desire now, they will have missed out on the chance to save money and, in all likelihood, will never have that opportunity again.
This Sale or That Sale?
As we've already mentioned, there are many ways to offer your e-shop customers products at a lower price and increase your sales. For example, you can make the offer of a free gift if they spend a certain amount of money. Other ways include offering free shipping, a percentage off the cost of the item or a discount on their next purchase from your store.
Some of these methods are extremely effective. For example, a large proportion of consumers prefer to gain 50% extra on the same product rather than a discount off the original price. At the same time, consumers are happier when they are offered a 25% discount on an item that already has a 20% discount rather than a 40% discount on the original price. Even if the discount is exactly the same in both cases, consumers are more likely to be attracted by the first method.
Wording
How your sales campaign is worded is extremely important in determining how consumers respond. One example is the difference between ‘get 10 Euros off' or ‘save 10 Euros'. In the first instance, there is an emphasis on a potential gain. The second focuses on saving something and means that if they don't take up the offer they won't save. Studies have shown that loss aversion is more likely to be effective over potential gain. Wording your message appropriately encourages the consumer to make more purchases even if not all your e-shop products are included in the sale.
The Long or Short of It
In order to have a successful sales period, you should stick to a specific time frame of a few weeks. If your sales period lasts for longer than the specified duration, then your customers lose their fear of missing out - yes, that all too well-know acronym - FOMO! In other words, your customers will have lost that fear that would have otherwise triggered them into action.
Consider how long you want your sales period to last and make that message abundantly clear to your e-shop visitors. Bear in mind that most sales promotions have a duration of about up to six weeks. When sales last for longer than six weeks, the impact of urgency on consumers starts to wane.
Pros and Cons
Having examined psychological factors, wording and time frame, let's have a look at the advantages and disadvantages of promotional sales campaigns.
Let's take a look at the disadvantages first. Having too many sales will have the opposite effect to the one desired - namely driving and motivating consumers to buy before a deadline. If consumers get used to the idea of not paying full price in your e-shop they are not going to feel the need to rush to take advantage of your sales when they are taking place. This will lead to purchase procrastination and a tendency to wait until the price drops even further. There are companies that doubt the effectiveness of sales and discounts in any form and, as such, discounts do not play any role in their marketing strategies. However, on the whole, sales are thought to be an effective promotional tool as long as they are not used too often.
On the positive side, we must not discount the advantage of the increase in customers that a sales campaign will bring. New customers will want to take advantage of the lower prices you are offering during the sales period. The lower price on a particular item can be the factor that attracts a consumer and results in their becoming one of your customers.
The sales period not only constitutes a strategy of recruiting new customers but a popular sales campaign can also have benefits for your existing customers. This can take many forms such as a token of gratitude for their loyalty to you. Create discount coupons, offer free gifts or higher discount percentages for your best customers. Using first names in your communication of these offers will also encourage a sense of a personal connection with your customers. This special treatment will make the customer feel valued thus enhancing the likelihood that they will favour your e-shop for their purchases.
Marketing psychology as we mentioned in the introduction is a science which studies human behavior as a consumer. The motives, personalities and the ideal marketing practices are elements which should be studied in depth if you want to develop the business initiative and innovation of your company. The psychology behind sales constitutes maybe the most basic factor that you should think about. Next time you are preparing for a sales campaign, spend a little more time considering which type of promotion is ideal for your audience so that you increase your sales.
