In honor of our store’s 40th anniversary, we decided to send out a card to our extensive mailing list (rounded up using a rented list of potential new customers) offering 40% off any one item during this month.  The response has been overwhelming, and I thought I’d share some tips in case you decide to try this kind of “loss leader” promotion to get people into your store.

When we discussed the idea initially, we agreed to exclude gift cards, Cooking School classes, and two categories of low-markup items (in our case, electrics and cookware sets). Here are a few other suggestions:

1.Clearly specify the date (including the year) that the promotion ends.

2.Don’t send it out in an email or other format that can be duplicated.

3.Be very specific about what is excluded, and limit the offer to in-stock merchandise

4.Check to see if any of your display fixtures have price tags, and consider taking the tags off during the promotion. (Goodbye, kitchen cart!)

5.Remove or reprice deeply discounted merchandise if you are going to honor the discount off sale, not regular, prices (be sure to decide one way or the other in advance, and let your staff know).

6.Put a gift receipt in with any purchases made at 40% off to prevent giving an exchange, refund or credit for the full amount if they are returned.

7.Specify that the coupons cannot be used in combination with any other offers. You could also consider saying that they are not transferable.

We are tracking the success of this promotion by writing down the total amount spent (which is often far beyond the one item at 40% off) and also what the customer has selected to use the coupon on.  Making this offer has meant that people we haven’t seen in a long time are coming in to shop, and also that regular customers are spending a long time in the store in order to carefully consider their purchase.

Predictably, the highest ticket items — in our case cookware and cutlery — have been the first to go, and our stock is getting low in those areas (we won’t replenish until the promotion is over). One man decided to use his coupon on a $4.95 magnet, which is a bit hard to fathom, but most shoppers have been delighted to treat themselves to a high special item that they would not otherwise have been able to buy. And without making customers happy, we wouldn’t have a 40th anniversary to celebrate.

Happy Retailing,

Carol “Orange” Schroeder