Marketing 101: The Secrets to Running a Successful Sale

The 1990s have brought dramatic changes to the retail industry, led by the emergence of national discounters. The top problem facing "Main Street" retailers is maintaining their bottom-line profits. In today's competitive environment, with skyrocketing expenses and stagnant revenues, even well-managed retailers are caught between an inventory surplus and cash flow squeeze.

Many small retailers feel at a loss when it comes to promotion and marketing, and may even feel that it's a waste of money to pay attention to marketing efforts. But there are sales-building techniques that work. They can power up your business and wake up your customers.

There are three basic ways to increase your sales and make your business grow:

• You can find new customers
• You can increase your average sales transaction
• You can give customers more opportunities to buy more frequently from your business

Improving any one of these three categories will boost your sales. But the moment you decide that you're going to systematically improve all three categories, you'll automatically catapult your business.

The purpose of any business is to bring in customers, and that can only be accomplished through marketing. The most important survival skill is to be able to anticipate change and identify new opportunities. Small stores can fight back by updating their customer lists and business strategies--refocusing on items, price, and efficiency--and by countering with in-store celebrations, glamour and fun. A successful "Big Volume Sale" is the fastest and easiest way you can boost your sales, win customers back, and raise a large sum of money (from your current inventory) in a short period of time.

So how do you put on a successful sale? The most important requirement is to have a systematic marketing plan. The elements of the plan are detailed: click on each of the subjects below for more information.

In retailing, the trick is to know your competition; your customers certainlydo, even if you don't. To survive and prosper in today's competitive markets,small retailers must develop more efficient operational and marketingstrategies. Stores wedded to the old ways of doing things are almost sure tofail.

Finally, you should never hesitate to hire a professional for any of yourbusiness needs. Whether it be a freelance artist for a newspaper ad or yourdirect mail, or an advertising agency that can design logos to make yourbusiness more distinctive, an experienced voice can make a big difference.

For more about how small retailers are working to professionalize themselves,read "The New and ImprovedAmerican Small Business" from the January, 1995 issue of Inc.magazine. Tom Ehrenfeld's expansive article profiles the transformation ofHarry W. Schwartz Bookshops in its adoption of nearly every tactic big businesshas brought to the once-quaint bookstore industry. Included in the story: thefive attributes that set professionalized small businesses apart. Also take alook at Ed Welles' story "WhenWal-Mart Comes to Town" (July, 1993) profiling one small town's response tothe arrival of a superstore.

Proper Timing

Focus on the best months for in-store traffic. Below are average response rates based on hundreds of sales over a period of years. You can hold a sale any time of the month or year, however, some months have proven to be better than others.

Response rates for producing in-store traffic:

Once you decide when to start your sale, you should allow 3 to 4 weeks for preparation. With careful planning and follow-through, you will be able to insure higher profits by deciding the correct timing, preparing the advertising, and balancing your inventory to ensure a profitable turnover from start to finish.

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Acquiring Customers

Get off to the right start. The most important thing you can do to create a successful sale is to develop your customer mailing list. Some simple methods:

• Ask every shopper who comes into your store to fill out a preferred customer card so you can update your mailing list. Even if they don't make a purchase, they are potential customers
• Acquire membership lists of local organizations, clubs, and churches. (If you don't belong, ask employees or customers.)
• Copy names and addresses from customers' checks.
• Purchase qualified names from mailing list companies. These companies include American List Counsel (1-800-822-LIST) and Edith Roman Assoc. (1-800-223-2194)

Experience shows that retailers who have up-to-date customer mailing lists receive the best results. It is better to have 500 to 2,000 qualified names rather than 5,000 to 10,000 non-qualified names.

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Merchandise Pricing

Your markdowns are critical to the profitability of your sales campaign. If the majority of your merchandise is current and in season, only a small percentage of your stock needs to be marked down more than 25% - 30%.

General Guideline for Pricing Seasonal Merchandise: