Results Revolution » Restaurant Marketing

How to Hold a Great Sale (And Still Make a Profit)

Marianna Chapman — Sun, 01 Jan 2012 18:49:34 +0000

January.

For retailers, it’s cold not just outside, but indoors when it comes to moving the stock off the shelves. After the Christmas-buying sprees, most shoppers are back at home cooling their heels while retailers try to entice them back out to buy. The one stand-by many local store owners turn to is holding big sales, and they’re finding that in a tough economy it’s necessary to offer deeper and deeper discounts to get folks back and willing to buy. It’s great to have warm bodies in your store again, but it’s not great if your sale ends up making you no profit due to all that deep discounting.

So what’s the method of success that allows you to get the customers back and still make a profit? Is there a way to get both?

There are several methods you can employ to attract business and still maintain a profit margin. See which one of these (or more than one) will work best in your restaurant, retail store, or service-based business and give it a go.

Know Your Bottom Line, and Sell Just Above

This is the method to use with that inventory that needs to move out the door, not with that great new batch of products that just came in for Spring. Calculate your bottom dollar on these items: how low can you go and still make something, even if it’s a small something? Then make your strategy to sell many of these items, each bringing in that small amount of profit, and you’ll end up with a good amount of profit when all is said and done. Plus you’ll have cleared your store of excess, aging inventory.

Create a Loss-Leader

Grocery stores use the loss-leader method just about every week; their circulars advertise a deal that’s “too good to pass up” for their shoppers. In many cases, the grocery stores are taking a loss on this item, but they know that just getting the customers in the store is worth that small loss. How many times have you gone to the grocery store and bought just one item? Most of us don’t shop for groceries that way, and why not? Because in the process of locating and purchasing the loss-leader item, we’re unable to ignore the displays of other great merchandise – some also discounted, some not – that we have to walk past and around to find our goal. Use the same strategy in your store; advertise a huge discount on a popular item, set up a great display for it, and put it smack in the middle of many other great displays with enticing offers of their own.

Offer Package Deals

Another angle on the loss-leader strategy is to offer package deals and discounts; this method allows you to package your items of choice together, being sure that one of them is a cheaper item for you to purchase, which gives you greater wiggle room for a discount. You can offer a greater discount on a combined package, knowing that your combined investment in all the package items is still well below the discounted package price. You might even use a “buy one of these, get one of these other things” free method to sell a costlier item without a discount while taking the “loss” on your cheaper, freebie item. It’s the same method beauty product companies’ use when they offer a “special gift” with a purchase.

Add Value that Doesn’t Cost You Cash

What can you offer your customers that doesn’t come with any cash cost to you? Look beyond the basic inventory, and think about subscriptions, memberships, special discount or dining clubs, consultations, or other perks that offer a huge incentive for customers thinking about a purchase. The value is still there for the customer, who would otherwise have to pay to get the subscription or membership or consultation; but the value-added item isn’t costing you cash that you can’t afford to lose. Use these value-added items to upsell; offer them as freebies or part of a package, which allows you to give your customers an increased value for the same cost without decreasing your profit margin.

What method sounds best for your business?

Image by Alan Cleaver2000.

How to Identify Your Niche Customers

Marianna Chapman — Fri, 04 Mar 2011 20:26:48 +0000

As we explained in a previous article , the key to locally owned businesses surviving and thriving in a competitive, online marketplace and tight economy is to find and dominate a niche of their own.

Small businesses can’t compete with the advertising dollars and inventory numbers of huge national chains; they can establish themselves by finding a specialty and being the best in it.

You Can’t Please All the People

The toughest part of becoming a successful niche business is realizing that you simply won’t be able to make everybody happy. If you choose to specialize your small business in science fiction, for example, then you won’t gain a following of classic literature lovers. But you will gain science fiction fans. If you choose to specialize your locally owned restaurant in a specific type of cuisine, perhaps Italian, then you’ll lose the people who don’t like pasta. But you’ll have fervent and loyal customers in the pasta lovers.

The Trade Off

For a business to succeed in a specialty or niche, it has to make a trade-off. You trade the complacent, so-so, average customers for the fervent, dedicated, enthusiastic ones. Sounds like a good trade, right? It is, because a few enthusiastic customers will give you more in lifetime value and passionate referrals to their peers than many average customers.

Finding Your Enthusiastic Fans

The first step to identifying those customers you want to find and keep for the life of your business is to clearly define your specialty. What are you offering that’s different, better, or more unique than your competitors? Once you’ve identified your own niche – your special offering – you’re in the right position to find the people who will be interested in what you have to offer.

The second step is just a bit of simple brainstorming: who is going to be the most interested and the most enthusiastic about your specialty, your niche? Don’t focus on the people who might be interested. Focus on the people who will love what you offer. If you’re selling science fiction books, you need to be at the sci-fi gatherings, clubs, and conferences, and partnering up with the local theater when the next sci-fi movie opens. Market yourself to the most passionate people in the particular niche; they, in turn, will market you to the people they know. When you find and convert enthusiastic customers, they do the advertising for you.

Places to Look for your Niche Customers

Specialized online communities and groups
Local clubs and meetings
Conferences
Meet-up groups
Fan clubs
Organizations and associations
Trade shows

Note: If your “niche” is too big to define and go find in groups like these… then your “niche” isn’t a niche at all – and you need to work harder to find your small business’ niche – a truly narrow scope or specialty that will create a winning formula for your business in a difficult economic time.

Where would your ideal customers hang out? Where do they gather? That’s where you need to be.

Image by Rachel Voorhees.

Plan for the New Economy with the Niche Model

Marianna Chapman — Thu, 03 Mar 2011 18:58:39 +0000

Note: I got an e-mail a while back that challenged me on my inclusion of an Amazon link in one of my e-mail campaigns. This and the following post (and probably a few more beyond that into the future) will be my long-considered answer to the seeming “crisis” presenting itself to local brick-and-mortars… the invasion of big boxes and big-box style on-line competition. Here’s my first stab at how small businesses can beat Goliath.

Small businesses face a double challenge in the new economy; not only are we in the midst of recession like times, with everybody tightening belts and spending less, we’re also transitioning from store-front shopping on Main Street to isolated shopping via the Internet. Location is not the factor it used to be in shopping choices; anyone with Internet access (which seems to be practically everyone) can shop at any store online. The options have opened up, and for the most part, consumers seem to love the choices.

Locally owned small businesses can thrive in the new economy – and love it – but it requires a different approach. When your competition expands from being the other small retail shop two streets over to being the biggest national box stores plus the on-line retailers… it’s time to think of a new angle.

Independent bookstores are a good example, because the ones that have survived and thrive despite competition from Amazon.com have learned to work the new economic angle successfully.

The angle is this: you must create your own niche position and dominate it in order to compete with huge brands and online options.

It’s not enough to be an average bookstore, or an average retail shop, or an average restaurant. When customers have limitless options, average is not going to bring them back.

But you can bring them back.

Niche Examples from Independent Bookstores

An article in the New York Times highlighted how the niche angle has helped independent bookstores to survive. “Being a specialty store gave us something that would distinguish us,” said Alan Beatts, owner of Borderlands, which focuses on science fiction. “We are serving a special demographic, and we receive customer loyalty in return” For a locally owned bookstore, a niche could include

Selling signed first edition books (and holding regular author events)
Selling, trading, and assisting customers in rare books
Covering niche topics (stocking and special-ordering specialized books, magazines, newspapers, and trade journals)
Establishing expert status in book-related topics or specialized topics
Engaging an active online community and having stellar e-commerce options

So, if you’re a bookstore, a retail store, a service-oriented business, or a restaurant, how can you find your niche, establish yourself in it, and thrive in this new economy?

“It’s entirely possible that you will choose a niche that’s too small. It’s much more likely you’ll shoot for something too big and become overwhelmed. When in doubt, overwhelm a small niche.” -Seth Godin, business & marketing expert.

Want more ideas from the local book store angle? Here’s a post from USA Today on a similar subject showcasing ways that small local brick and mortar bookstores are competing with the Kindle, Nook and similar book technology…

Image by ReneS.

Last-Minute Valentine’s Day Marketing Ideas

Marianna Chapman — Thu, 10 Feb 2011 13:30:03 +0000

The good news for retailers this Valentine’s Day is that consumer spending is on the rise. An annual Valentine’s Day survey, conducted by the National Retail Federation, suggests an 11% increase in spending on Valentine’s Day purchases. The expected total spending on all the romance is in the neighborhood of $15 billion dollars.

If you’re a retail store or restaurant owner, you should definitely be reaping some of those benefits from increased consumer spending.

And if you’re a retail store or restaurant owner, you should definitely be planning how you will attract those sales. Throwing a few paper hearts in the window is great, but come on: you can do better than that.

Even though we are less than one week to V-Day, you can still make the time count.

10 Last-Minute V-Day Marketing Ideas

1. Market to the ladies! Though men traditionally spend more on their Valentines than the other way around, women still comprise a large chunk of Valentine’s change, with the average female consumer expecting to spend around $80 on Valentine’s purchases this year. So clear out some of that lacey, heart-shaped stuff and put together some gift packages and product promotions that any red-blooded male would be happy to receive as a gift.

2. Put together a last-minute shopper’s package. Or several. There will be many who delay shopping until the last minute, and if you can present options that are thoughtful, creative, beautifully packaged, and good for several price points, you can get their business.

3. Hold extended hours on the weekend before Valentine’s Day. If you’re not usually open on the weekend, make an exception. Stay open late on Saturday night. Open up for a few hours on Sunday afternoon. Advertise your additional hours, of course, as a special time for Valentine’s shoppers.

4. Offer Early Bird Specials on V-Day itself. This year Valentine’s Day falls on a Monday; open up a couple of hours early for those wanting to grab a gift on their way to work. Put together a special discount for the Early Bird Shoppers. Have some piping hot coffee available, too. Donuts wouldn’t hurt.

5. Offer free delivery. Of course, not every business is set up for this, but if you are, then capitalize on it. Restaurants could offer pre-made romantic dinners to be delivered the day of (or a day ahead) with instructions on cooking or reheating as needed. Retail shops (beyond florists!) could offer beautiful wrapping and timely delivery of any Valentine’s gift purchased. It doesn’t have to be free, either.

6. Offer a custom shopping service. If you have some talented sales staff, offer to assist shoppers; uncertain or time-crunched spouses can call in with a price point, a few details about their significant other’s tastes, and then have you pick out, wrap (and deliver?) and charge them for a great, custom-selected gift.

7. Appeal to the rebels and creatives. Break out of the traditional Valentine’s Day flowers-candy-chocolates-dining gift list. What do you have that is quirky, funny, creative, off the cuff, special in a non-sappy way? There are plenty of people who are tired of the same old options. Give them something refreshing for a change.

8. Go with a red-and-white color theme. Help yourself think out of the box by promoting anything that fits into your red-and-white criteria as potential Valentine’s material. You could even offer a discount on any red or white items purchased between now and February 14th.

9. Offer an incentive with a future deal. Give a coupon towards 20% off future purchases with any purchase made for Valentine’s Day. Designate amounts if you want. Or make it for a specific product or service.

10. Extend your great offers through “Valentine’s Week.” Offer deals for the dudes in the doghouse (“Forgot Valentine’s Day? We can help!”) or the gals who didn’t get what they wanted (“Not loving your Valentine’s gift? Come pick out your own!”). Hey, when love is in the air, don’t just leave it hanging!

Image: Samantha Marx.

Results Revolution » Restaurant Marketing

How to Hold a Great Sale (And Still Make a Profit)

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How to Identify Your Niche Customers

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Plan for the New Economy with the Niche Model

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