Question

Topic: Customer Behavior

Two Offers At The Same Time?

Posted byClive Fernandeson3/21/2007 at 1:32 PM ET 250 Points
Hi all,

I have a client who sells downloadable content on the internet. Once a year he has a monthly sale in which prices of all products are slashed by 50% or more. This has proven to be very effective in increasing total sales and gaining new customers.

This year he also wants to hold a sweepstakes contest where everyone buying a product will get one chance of winning a grand prize. We are planning to have about 5 prizes with one being a big one. The more products you buy, better the chances of your winning become.

Now my question is should we have both the promotions together or schedule them at different times of the year?

The pros are that the double promotion will send sales really high and give us good publicity.

But if we schedule them at different times, each promotion will itself generate an increase in sales and perhaps the total increase will be more than the first option.

Your thoughts?

Clive Fernandes
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RESPONSES

  • Posted byClive Fernandeson3/21/2007 at 3:38 PM Author
    Dear Karen,

    Thanks for the response. I would like to share some more information about the above.

    This is only the second year the sale is happening, so there won't be a lot of customers actually waiting for it. Plus from last years data, the total profits during the sale period remained same as the previous month even with the lower prices.

    你让很有效的点,这让我ask me another question, do contests really have an incremental affect to a degree that a discount sale have?

    Clive Fernandes
  • Posted byadammjwon3/21/2007 at 4:30 PM Accepted
    Clive,
    I would also point to the fact that if you run promotions separately you can easily identify you ROI on each one of them.That's quite importnat as will give you guidelines as to which one works better.
    To some extent you will get an answer to your question no.2. We do not know how price -sensitive your customers are.You surely have the answer as you can say how a 50%iprice slash translates into higher sales.

    Adam
  • Posted on3/22/2007 at 12:38 PM Accepted
    Ditto the above.....

    The new customers generated from a contest will absolutely have a different profile than those who buy during the sale - and you'll have a third profile of the full price regular customers.

    Analyze those profiles to determine and define your "best" customer then employ strategy to cultivate that type of customer.

    Good Luck - See my profile to email me.
  • Posted byClive Fernandeson3/22/2007 at 4:42 PM Author
    What you guys makes sense I suppose. Its just that we wanted to make a big splash with the dual promotion and really get the business in peoples eyes. But I'm more than veering towards the suggestions given here now.

    Anyone with an alternate view?

    Also, can anyone paste some resources I can use to track the results of the promotions. Tutorial links, products, softwares, anything.

    Regards,
    Clive Fernandes
  • Posted byAli Mustafaon3/25/2007 at 5:21 AM Accepted
    hi clive

    I work for a retail company in kuwait, once we did two promotions at a same time thinking that we would have an increase in sales but unfortunately we didnt see much difference.I totally agree with karen,adam and tom that you should run this two promotions seperately, From customers point of view it dosent make any difference, customers waiting for sales will buy from you at the sales time only. And by running a sweepstakes promotion that will be very beneficial for you to collect the database which you can use it in the future for informing them about the up coming sale or any other promotions. hope this will help you

    best of luck

    mustafa
  • Posted byClive Fernandeson3/25/2007 at 3:47 PM Author

    I have decided that the best thing to do is have the two promotions separately as you have advised.

    Thank you everybody for your responses.

    Best Regards,
    Clive Fernandes
    Clive Fernandes Consulting
  • Posted byClive Fernandeson5/11/2007 at 4:31 PM Author
    Hello everybody,

    Just wanted to give everyone who participated here an update on the promotional campaign. We decided to go with only one offer as was suggested, but to beef up the offer we updated a lot of new content that could be purchased.

    The results are here and there has been an astounding 40% increase in $ figures even though the price of the individual items were reduced by 50%.

    Thanks for all the advice.

    Best Regards,
    Clive Fernandes
    Clive Fernandes Consulting
  • Posted byadammjwon5/11/2007 at 5:04 PM Member
    Clive

    My congratulations and thanks for keeping us updated.
    It's a great pleasure to see it working.

    All the best

    Adam
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