Flash Sales: A Risk with a Reward
On one hand, you could gain a ton of new customers. On the other hand, you could end up working with a deficit and damaging customer relationships.
Welcome to the world of flash sales.
Flash sales are promotions that run for no more than a few hours, often coinciding with heavy buying days like Black Friday and Cyber Monday. They offer huge discounts to customers to move out old merch, and they can be a highly effective way of gaining new customers. However, if not run correctly, you could end up losing a bunch of potential profits and damaging your relationship with your customers.
Crazy to attempt? Maybe. But the payoff might just be worth it.
How to make a flash sale work for your biz
A bit of history: In 2009, flash sale websites like Zulily and Fab were at the top of the charts. Today, they’re mere ghosts of their former glory. It turns out that limiting stock creates a pain of disappointment that is enough to drive away potential buyers. And worse, when they don’t get the product they want, they vent on social media.
On the other hand, Amazon’s flash sale “Prime Day” has been a repeated success, and many other e-retailers are offer “deal of the day” sales to follow suit.
Print shops can learn a lot from these examples. At their best, flash sales are an effective way to move out surplus merch while attracting new customers. The key is doing it right. This is not a sale to undertake without a lot of planning. But if you get it right, a flash sale can bring a healthy boost to business and even increase customer loyalty.
Start with a clear goal
To make a flash sale a success, you have to be doing it for the right reasons. Do you have some surplus inventory that you want to sell off? Do you want to get in front of new buyers? Deepen your relationship with current customers?
You might think, “Those all sound good!” but each one will encourage different actions. For example, if you want to get in front of new buyers with a killer deal, marketing it to existing customers is just going to erode your profits without much return.
Determine your buyers
Spend some time carefully considering who your ideal buyer is, and don’t waste your time with anyone else. The goal is not to spread the net wide, but to target the group that is going to fulfill the goal you set. For example, if you want to bring in new customers, think about what type of customer is going to be most valuable to your business. What types of customers tend to make only one purchase, and what types tend to return?
Get the timing right
Flash sales are traditionally short, no longer than a few hours. You may want to increase this time to a day or a weekend, depending on how risky your discounts are ($50% off your whole store for a weekend will probably do more harm than good!).
Getting the timing right is crucial. Take a look at your website analytics and find out if there are any patterns to purchase times. Does it tend to take place more in the evenings? Weekends? Also consider when your email open rates are highest. Email is a powerful marketing vehicle, and will likely be your main traffic driver.
You may want to consider holding your flash sale during a consumer holiday, such as Black Friday or Small Business Saturday. Other holidays can work too, though—for example, you could do a flash sale of St. Patrick’s Day T-shirts or Independence Day gear. Check out Google Trends to see when certain goods are being searched for most often.
Timing is everything when it comes to marketing as well. A sale with hyper-seasonal products (such as St. Patrick’s Day goods) can be promoted decently in advance without much damage. But if you’re doing a wider sale, promoting it too early runs the risk of encouraging customers to wait until the sale to make a purchase. Leave time for solid advertising, but don’t start more than a week or two in advance.
Make it worth their time
A flash sale has to be a deal that they wouldn’t get during a normal promotion. 10% or even 20% off won’t cut it.
But that doesn’t mean you have to go based on price alone. If 50% off won’t help you meet the goal you set, there are a few other pricing techniques to try. For example, you could do a smaller discount plus free shipping. Better yet, bundle a few products together and discount the whole package—it makes it seem like a more exciting deal than just a percentage.
Inventory
One of the biggest pitfalls of flash sales is the difficulty of estimating inventory. On one hand, you could underestimate the sale’s popularity and run out of stock far too early. On the other hand, you don’t want a ton of goods sitting around afterward.
The solution is researching demand. For smaller businesses, this might be as simple as asking a few of your key customers if your sale idea is something they’d want to buy. As you grow, this should develop into more pointed market research, such as through email surveys and online advertisements.
If you do miscalculate and find yourself unable to fulfill orders, your first step will be to let your customers know and explain what you’re doing to fix the situation. Your customers will be far more forgiving if you simply keep them in the loop.
Track and understand your results
When the sale ends, it’ll be tempting to relax. But your job isn’t over yet. It’s time to see how you did.
Start with your bottom line. Was this profitable? Did you win new customers? How well did your results line up with your original goal? Don’t go based on gut. Answering these questions will help you determine what worked and what didn’t.
So, to flash sale or not to flash sale?
Are you gonna to give it a go? Sound off in the comments!