High Performance Retail

Pre Purchase Selling Technique

Easy Sales Tips

Here’s a tactic to generate some money by selling something you may not even have yet! Sound good?

Now I’ve used this to capture some special event money early, which may be a few months away, like Christmas for example.

Why not offer your top 100 customers a December spend voucher at a discount if they buy it today in October? I needed some cash once and used this offer to generate money in a hurry, of course there was a deadline and I made the offer very good.

In this case it was get a $400 voucher to spend in December for only $300 pre paid now. My good customers easily spend that anyway so for most of them it was a no brainer. This is a big benefit of being able to drill down through your data to find the right people for the right offer. Of course it would be wasteful to make that offer to someone who may have only shopped with me once that year. However I knew my good customers would be interested in that deal. And I had a committment they were spending money with me not a competitor.

You could use this to pre sell a new product about to hit the stores and gazump your competitors by capturing the money before the item hits the stores.

I once sold Thousands and Thousands of dollars worth of mobile phones in Broome WA and started selling SIX MONTHS before construction even started on the first mobile phone tower.

By the time the phones even worked I had gazumped the marketplace.

Think of a future buying event and give the right customers the right reason to spend early. Great if you have a tax bill or something coming up and you want to generate some cash fast!

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Why Discounting Is Bad For Retailers.

It never ceases to amaze me how quickly Retailers are prepared to drop their pants on price and offer regular discounts for all manner of weak reasons. I call discounting the lowest common marketing denominator. It’s poor retailing no matter how you look at it.

Re-package, re-position, re-purpose your products and offers but avoid direct discounts whenever you can. And here’s why!

If you discount by only 10% here’s the cost.

If your margin is 60% then you need to sell an extra 20% more product to make the same profit.

If your margin is 50% then you need to sell an extra 25% more product to make the same profit.

If your margin is 40% then you need to sell an extra 33% more product to make the same profit.

If your margin is 30% then you need to sell an extra 50% more product to make the same profit.

And if you discount by 20%, then:

If your margin is 60% then you need to sell an extra 50% more product to make the same profit.

If your margin is 50% then you need to sell an extra 67% more product to make the same profit.

**If your margin is 40% then you need to sell an extra 100% more product to make the same profit.

If your margin is 30% then you need to sell an extra 200% more product to make the same profit.

These are massive sales figure to make up. Massive figures which you need to increase sales by just to make the same profit. Look at the line with ** and let’s discuss.

If you need to sell 100% more to make the same profit, you will probably need more staff to handle the volume (assuming you could double your sales). This then comes out of the profit putting you behind. You will need more quality stock to make the sales. Lets face it the consumer is smart and won’t buy rubbish these days even if it is cheaper rubbish. This makes more work for all concerned and no extra profit.

Use discounting and sales as a limited stock clearance or true end of season strategy or you will be training your customers to wait for “the next” sale. Look at the proliferation of people buying vouchers at the big department stores as gifts for Christmas or giving money waiting for the “after Christmas’ sales.

The department stores have trained their customers for years not to pay full price before Christmas because the next day it will be cheaper. That’s a treadmill you do not want to be on. Yet so many Retailers are heading down the constant “sale” path it’s scary.

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