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How to run a sale

Thinking of running a sale? It's important to have a strategy

By Anisah Osman Britton

Nomfundo Mphuthi has been driving marketing strategies for corporates and brands for over a decade, and is currently strategy director at fashion shopping app Lyst. She advises fashion brands on the platform on market and customer trends and helps inform their strategies including sales and pricing decisions. One topic she’s an expert on is sales events.

In our Startup Life newsletter, we asked Nomfundo for her top tips on how to run a sale. 

Know why you’re running a sale

This will help you decide how much to discount, for how long and who to involve (depending on company size and structure, this could be the marketing, pricing, fulfilment or merchandising teams). Here are some reasons you might consider one:

  • If everyone in your industry is running a sale — for example mass sales events like Black Friday or New Year’s Day sales — you may want to as well to remain competitive and make the most of busier online traffic. Consumers will be expecting deals.
  • You need to move stock that hasn’t sold that season so you can avoid the increased storage costs or a logistical nightmare trying to dispose of extra stock. This is particularly relevant in the fashion industry and for products like phones and laptops that get upgraded regularly.
  • Sales have been slow and you need to increase cashflow.
  • You have a new product and you want to draw in customers to gauge their interest and get their feedback.  

Don’t go on sale too early

During mass sales events, it’s tempting to go on sale earlier than the rest of your industry, but if you do, you risk not being able to ride the wave of collective consumer excitement. Similarly, if you need to move stock that hasn’t sold that season, wait until the end of the season or the beginning of the next one to discount — earlier may help sales numbers, but you risk training customers to not pay full price.

Plan in advance

Give the team plenty of notice to prepare: the marketing team needs time to get the message out; the fulfilment team needs to be prepared for increased sales; and the customer service team needs to have enough people to deal with increased inbound enquiries, returns, etc.

Don’t rely on sales to hit revenue targets

Current consumption isn’t at predicted levels due to macro factors putting financial pressure on consumers. There’s definitely deeper discounting across industries. However, running frequent sales is a risk to your company’s reputation and finances: it undermines your pricing strategy and “full price” won’t be perceived as worth its value. You won’t have regular recurring revenue as customers will wait for you to slash costs before buying. However tempting it is to go on sale for a quick cashflow win, your strategy needs to be explicit about when and how often to discount — then stick to it.

 Ringfence products that can never be discounted

If you want something to be perceived as premium and desirable, don’t ever discount it — this could be your flagship service, product or feature. It will also help regulate the value of the company’s other offerings as it provides a constant to measure against.  

Target a specific audience

Blanket sales may not be the right option to meet your targets. If your goal is to retain loyal customers, for example, you could privately reward them. Send them a discount by email, or run an exclusive or early access sale just for the biggest spenders. You could also target customers by sales channel — for example, Instagram or Twitter ads with a discount code for new customers.

Weigh up the green implications

  • Sales do encourage people to buy more. However, a sale could also stop stock from ending up in landfill or being burned. Sales also give consumers choice.
  • A more accessible price can encourage customers to take a risk on a new sustainable company that doesn’t have the reputation or low prices (due to smaller scale production) of bigger, more established companies.

On the subject of… discounting your product

💸 Subscription models don’t have to offer free trials. There may be better ways to gain the trust of potential customers. 

🤔 How to offer discounts as a B2B startup. In a competitive market, a financial incentive can help you stand out. 

📚How do you offer volume discounts? Their purpose is to get customers to purchase more than they originally planned.

🛒 Do you run an ecommerce store? If so, here’s how to run a sale on it. 

🐝 Build some buzz. Create hype, boost awareness and find new customers by running a flash sale.

Anisah Osman Britton is coauthor of Sifted’s Startup Life newsletter, which comes out weekly on Wednesdays. Sign up here.

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