|Retail Successentials July 2014: Get ready to boost customer spending with special offers|
|Written by Bill Nielsen|
|Monday, 09 June 2014 04:20 PM America/New_York|
Get ready to boost customer spending with special offers
Your cash wrap can be a ministry-driving sales machine
You hear it on TV every day. If you’re like me, you even predict it and chime in with the spokesperson, “But wait, there’s more!” While we laugh, deep down we expect to hear it. Let’s face it: We love a great deal.
If you learn the art and science of how to structure and provide last-minute incentives to your customers, you can add 3% or more sales growth to your store with this one simple, yet powerful strategy. More importantly, you have the opportunity to help your customers grow in their personal walk with Christ and/or equip them to help someone else grow spiritually. In addition to the ministry potential, imagine what 3% sales growth means for your profit, since it can be done without adding any incremental expense to your operations!
First, let me address the scoffers who are already struggling with my 3% claim. Follow me on some simple math. The average CBA customer spends $32 per transaction on average (Note: If you are well below this average transaction, go back to the first Retail Successentials column. Based on a $32 average transaction and the goal of adding 3% in sales, we must add 99 cents to every transaction. Another common way of looking at this is to add $5 to just two out of every 10 transactions. I have seen this strategy applied with successful results time and time again.
Through the years, retailers have tried virtually every possible way to increase their average transaction. The reason many efforts to increase average transaction fail is that they only result in convincing the customer to buy one item rather than another, resulting in little, if any, increase in the total amount spent. So, let’s focus on the one place in your store where you have the highest likelihood for success, and then give you two strategies to drive 3% incremental sales. Of course, I’m referring to how to avoid this pitfall by engaging the customer only when ready for checkout. Naturally, the best place to do this is the point-of-sale cash wrap. Observe the following tried-and-true practices—cash-wrap essentials and suggestive-selling approaches—and watch your average transactions grow:
Let’s first review how you can turn your cash wrap into a ministry-driving sales machine!
Look at your cash wrap again as if for the first time. Make sure you view it as the customer does. Is it easy to approach? Is there room to set down the items the customer wishes to purchase, or is it so cluttered that checking out is a chore? Is this area a bulletin board for the community, or does it help you to place life-changing products into the hands of your customers at the last minute of their visit? What products are presented there—those that are just the right size to fit or those customers have a need for or interest in? Take time to reorganize your P.O.S. cash wrap so that it is inviting and convenient for your customers.
Evaluate the products you have on display at the P.O.S. They also should not be stocked elsewhere in the store, but rather be a final new offering that catches customer attention. They should be mass-appeal products. If you have multiple P.O.S. terminals, the same products should be positioned at each one.
Price the products at your P.O.S. at $5 or less. The $5 or lower price point has been tested across hundreds of thousands of customers and found to be the sweet spot. When setting your pricing, remember to focus on margin dollars here and not margin percentage. Adding none of an item with 50% margin to a transaction gets you nothing, but adding the same item at 30% margin to many transactions will add sales and profit to your operation.
Help the product sell itself. Invest in some eye-catching POP that screams the price and calls out the “why buy me” message. Restock the product several times each day.
Keep special-offer product only at check out. This select product should only be behind the counter and presented as this month’s special offer.
Stick to $5-or-less pricing. This pricing strategy not only applies here, but is critical. Moreover, reach out to various suppliers and encourage them to partner with you on this “plus sell” initiative. If they see incremental unit volume of a title and know that you are focusing on margin dollars and not just your normal margin percent, many will join you gladly by providing titles as they have room to sell them to you at a deep discount. Be prepared for some vendors to not give the discount on the front end, but they may ask you to focus on titles you have deep quantities of on hand and offer you a back-end credit so that you will not return the item, but instead sell through it.
Train your staff to feel comfortable talking about the offers. Practice using simple scripts so they are ready to address your customers with the offers at checkout.
NEXT ISSUE: We will take a look at how to prepare for the holidays to maximize spiritual impact and store profit.