Retailers have a giant opportunity at the point of sale. Most are blowing this chance.
I’m not talking about placing high-impulse items for purchase at the POS. Depending on the business, these products can be a huge profit driver for a company. Hopefully, business owners who are in a position to sell impulse items at the point of sale—even if they are just candy or soda—are already taking advantage of this strategy.
No, I’m talking about Point-of-Sale Marketing Systems that really work the marketing angle for your company. They promote products and services your customers may not have thought of buying during their time in the retail location, and they do this in the place where’s they’re most “captive”—in line, waiting to buy what they came for in the first place.
Why Use Point-of-Sale Marketing?
Let’s face it. You’re already paying some amount to get each customer you have through the door, via marketing. This means that you have an acquisition cost for each new customer. Your acquisition cost is determined by how much your marketing costs are, divided by how many customers it brings into your store.
Once you’ve calculated this figure, you can determine how many times each customer needs to purchase from you before they become profitable. In the average business, this will mean selling to them 2.5 times before you begin to make a profit.
Assuming your customers buy a bare minimum from you, and they only come in your store once or even twice, you’ll actually be losing money each time you acquire a new customer. By using a planned, targeted Point-of-Sale Marketing System, you increase both the amount of money that each customer spends with you, and the number of times they’ll return to your location(s). It’s at that point they become a profitable customer.
Just to be clear, you have two goals from any POS Marketing System:
- Increase the sale you make during their initial visit;
- Get them back in the door to make additional sales.
I’d add a third one, too: Rinse and repeat.
A Point-of-Sale Marketing System is one of the most effective tools in your arsenal to increase your average dollar sale, and encourage return visits to your store(s).
The Making of… A Successful Point-of-Sale Marketing System
A number of key elements are needed in your new system, in the proper amounts. The most important of these is the selling message. To make this work well, you’ll need to know your audience and what they’re looking for when they’re in your store.
Another important consideration is any offers you’re making. No matter how well written or entertaining your Marketing System is, you won’t gain any additional sales or visits if you don’t make great offers.
Test and Measure
When it comes to POS Marketing systems items and campaigns, I think it’s safe to say that just about all business owners want to think:
- The owner will immediately know if her or his efforts are successful, but it won’t matter because…
- Everyone will love the items and messages, and…
- No one will have any positive or meaningful feedback for the owner.
I call shenanigans on all of these. That’s why before you get started, it’s critical that you understand the principal of testing and measuring.
Just the same way you’d try different ads in the paper to see which one worked the best, you need to be prepared to change your counter displays around and find out which approach works the best.
Remember, it’s always better to hand out 20 newsletters, catalogs or brochures that don’t work, than 20,000. Even if you love your new system, and everyone who sees it goes crazy, it’s important to keep your head, and avoid going too far too soon.
Take it slow at first, check the response then gradually increase the numbers. If you hand out 100 marketing pieces, and find that 10 of the coupons or ads come back, it should follow that 10,000 of those pieces should turn into 1,000 additional sales.
Of course, nothing is ever that certain in marketing or business, and you really have to wait and see. Having said that, it’s important to realize that if you hand out 100 pieces and see none back, then you’d be a little insane to expect 10,000 to do much—if any—better.
You have the option of creating a number of versions of your marketing pieces, and trying all versions at the same time. It’s very important to ask each person where they heard about you, and which piece they have. Record these into some kind of tracking system, so you can see what’s working and where they’re seeing it.
Over time, you may notice that one version seems to do much better than the other. This is the one you keep.
When customers give you feedback, LISTEN to what they have to say. Don’t block out their criticism of your favorite design, or minimize their praise of the one you didn’t like.
I can’t think of any situation where a business owner who depends on foot traffic and maintains a point of sale presence would not want to promote her or his goods/services. I’m not saying they should remove all of their high-margin impulse items, of course. And there’s some foot traffic/POS-driven businesses that can’t offer such products.
Properly done, promoting one’s business to encourage repeat purchases, and hopefully a lifelong relationship with a current (or new!) customer or client, can only improve a business’ bottom line.
Coming soon: Our multi-point guide on Point-of-Sale Marketing. We’re working hard to build our download page for this special report. But the report itself is ready to go NOW! Just contact us and we’ll send it to you via email.