The power of promotion is real – especially during the holidays. Usually once October begins, the promotions hit. This year, it feels like they started in September! Not only do promotions aid in differentiating your brand from competitors, but consumers rely (and look forward) to the upcoming promotional season. Most importantly, promotions are extremely impactful for closing the year strongly in terms of revenue.
With the help of Mailchimp, here are some building blocks for building a marketable and profitable holiday promotional strategy.
- (1) Lay the foundation. Establish your everyday product prices within a sensible margin target. Understand your pre-product shipping costs and their impact on your profitability.
Tip: Pay close attention to inventory throughout the year – especially leading up to the holidays. Encourage increases in Average Order Value (AOV) and Units Per Transaction (UPT) early on.
- (2) Offer a variety of promotions. Before offering a promotion to your customers, you want to ensure that you understand your shipping costs (as mentioned above). Overall, any promotion should start with healthy, everyday pricing. Here are couple of ideas: coupon codes for existing customers or new prospects, free shipping, dollar-off and percent-off discounts, “buy more, save more” options, and limited time offers.
Tip: 79% of customers are more likely to buy online if they are offered free shipping (source: (Walker Sands, The Future of Retail 2018).
- (3) Don’t forget about marketing your promotions. If you market your promotions in advance of the holiday season, they will likely drive even more revenue. There are many effective ways to market your promotions to drive revenue before the holiday rush, such as pop-up forms to build your captive audience and email segmentation (i.e., communications to existing customers with early access to your offers). Try not to neglect organic and paid social. Tactics like increasing the frequency of your organic posts and executing in-market and look-a-like audience targeting will impact your sales.
Tip: Email is still considered to be one of the most profitable channels in terms of ROI. If you are worried about open rates due to the iOS 15 update, check out our response to this news. There are many other reliable metrics that will measure your success.
For as many “do’s,” there are as many “don’t’s.” While promotions can drive success towards the end of the calendar year, they should be maintained. Make sure that you do not “set it and forget it.” Promotions are meant to get people to spend more money or help you win new customers. Therefore, we recommend monitoring the length of your promos, be mindful of timing, and most importantly, evaluate the performance of your promos in real time.
Information sourced from Mailchimp eCommerce Masterclass Series.