Promotions and giveaways in the service industry can be tricky. While they have the potential to be marketing assets, adopting specials without a strategy can quickly put businesses upstream without a paddle.
Here are four signs you may be headed for rocky waters:
#1 Giving Away the Whole Shop
Stay away from offering deep discounts or offering many discounts at once. Although you may see more customers than usual, the confusion and cost of running so many specials can hurt your business in the end. Specials should act as a way to reach specific, measurable goals, not give free handouts to your community.
#2 Expecting Social Coupon Sites to Bring in the Dough
Offering coupons through sites like Groupon and Living Social can be a great way to thank existing customers, attract new ones and create up-sell opportunities — but you shouldn’t rely on social coupons alone for revenue generation. Groupon keeps roughly half of the money for each coupon purchased. So, if a restaurant or bar is offering a $50 Groupon, it will only get $12.50 for providing $50 worth of food or drinks. Be careful what type of specials you choose – it should work as an incentive for customers, but it should also allow you to up-sell and recover some of the costs.
#3 Adopting a “Spray and Pray” Approach
Don’t concoct promotions, events and giveaways without a plan. Consider who you want to target, what you hope to gain from the special and how you will measure success. The ability to measure ROI is critical to evaluate the effectiveness of promotions and specials.
#4 Keeping Your Staff in the Dark
Make sure your staff is notified (well in advance) about new promotions and events. Hold regular staff meetings to explain what’s coming up, or post the specials near the register so everyone can see. Unaware employees will make your business seem unprofessional and could ruin your new customers’ experience.
I’m stuck upstream! What do I do next?
It’s easy to panic when you find yourself in the situations described above. Whatever you do, don’t panic – there’s always a way out!
If you have been losing too much money, then get off the coupon boat before it pulls you under. Hopefully your specials have generated interest and customers will return whether or not it’s buy one, get one free. The time without specials should give your company and your employees a chance to recover. Specials generally come in waves, so a break will seem natural to most people.
If you took the “Spray and Pray” approach, comb through your marketing net and remove the promotions that aren’t helping you. Chances are you’ll find one or two types that worked really well for you. Start over with a plan for these select specials and you should be floating back to safe business practices in no time.
Keep in mind that it’s the quality of your specials, not the quantity, that matters. Use them sparingly and set limitations so that your coupons don’t hurt your business. You don’t want to take the “special” out of your specials!