Price promotions have been a go-to marketing strategy for many retailers, especially in the age of eCommerce. Discounts, deals, and limited-time offers have become a routine part of the buying experience for many consumers. As a result, retailers have an understandable reliance on them.
Recently, Mark Ritson wrote an article on Marketing Week titled Seven Steps to Kicking the Price Promotion Addiction. It was a rallying cry for retailers to move away from short-term gains and adopt long-term strategies for brand and sales growth.
At RevLifter, Mark’s sentiments spoke at an even louder volume, as we happen to agree with most of them. And better still, our platform can help retailers achieve this goal by delivering offers intelligently.
The problem with price promotions
Repeated price promotions can significantly impact the bottom line of any retailer. While this might be counterbalanced by all the sales captured in the short term, it can create a pattern where consumers expect discounts every time they shop.
This pattern can harm a company's brand image, reduce margins, and, more importantly, make it harder to build customer loyalty. The impact of these promotions is not just limited to profit margins but also hurts product innovation, quality, and overall profitability.
Price promotions can be an effective way to drive sales, but they must work hand in hand with brand marketing. Taking a long-term approach and creating meaningful customer relationships is essential to success.
Targeting promotions intelligently
By offering targeted offers and discounts, retailers can create a more personal experience for their customers while increasing loyalty and building trust in the brand. Additionally, using technology to automate discounts and offers can help reduce the cost associated with price promotion activities.
This is where platforms like RevLifter’s come in - delivering intelligent offers tailored to the individual customer's needs and preferences. Our data-driven approach can analyze purchasing patterns, preferences, and behavior to customize offers that work for the customer and the retailer.
By personalizing offers based on customer needs, we can help reduce the reliance on price promotions and build a loyal customer base that makes value-based purchases.
Offers are more than price promotions and discounts
Another way our platform can assist in breaking free from price promotions is by giving customers rewards instead of discounts. While discounts may work in the short term, continuously relying on them can harm brand value and customer loyalty over time.
Rewards can include free shipping and exclusive perks like early access to new items or unique products. These help to increase customer loyalty, encourage repurchasing and reduce churn.
RevLifter’s platform also utilizes Artificial Intelligence (AI) and Machine Learning to analyze a customer’s on-site behavior and provide them with the best offers at the right time. This makes it easier for retailers to deliver effective promotions and assures customers that the company understands their needs.
Kicking the price promotion habit
By following a small set of principles, retailers can kick the price promotion habit:
- Try offering "always on" offers and dialing them up when sales are low instead of using them at crunch time.
- Using the best personalization tactics and offering rewards provide a more sustainable way to engage customers.
- Consider segmenting your website visitors and putting thought into context, because different offers make sense for different visitor groups.
- Think about your eCommerce funnel and goals holistically. For example, how much is an email or SMS sign-up worth?
- Use a test-and-learn approach to figure out the right intervention at the right time to drive the outcomes you want.
Mark Ritson's article is an apt reminder for retailers to adopt sustainable long-term strategies for profitability.
By offering intelligent offers tailored to the customer's preferences and rewards and utilizing AI-based analysis, retailers can build a loyal customer base while reducing reliance on price promotions.
It's time for retailers to break free from the price promotion addiction and work towards a more sustainable approach that benefits their shoppers, their products, and their bottom line.