Are Your Promotions Driving the Right Customer Behavior?
When planning promotions, where should you focus your efforts for the best results? It all comes down to the “Good, Better, Best” strategy in your product range.
- Good Segment: Your entry-level price points—perfect for attracting customers into your store. These should ideally be every day low price (EDLP). Promotions here? Limit them to major sales periods only.
- Better Segment: The heart of your business, typically driving 50% or more of total sales. Strategic promotions in this segment can persuade customers to trade up from “Good” to “Better” and spend more.
- Best Segment: Premium products where promotions can encourage customers to stretch to the top tier. A well-designed promo here can drive both aspiration and loyalty.
If you have a CRM solution, you can go further. Identify customers who shop primarily in the “Good” segment and target them with tailored offers to nudge them into “Better” or even “Best.” The real success? When they maintain this new shopping behavior even after the promotion ends.
Promotions aren’t just about discounts—they’re about building long-term value. Are your promotions doing that?If you would like more information on planning and running promotions and you have a Retail and Consumer Goods Industry WIKI subscription, click here.
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Posted by Brian Hume
20th December 2024
