Those words staring back at me through the glass display, seemed too good to be true. Even more mind blowing was the prospect of being done with my Christmas shopping in July.
In that moment, racing through my mind like credits from a movie were the many reasons why I should just do it! Yes! get it over and done with and check it off!
2)Less likely to have to deal with the long windy almost endless queues that come with shopping during the holidays.
3) Low inventory challenges were less likely to be the case, or at least until my needs were met.
There were “fantastic” deals swirling around in that store, but just like the sign hanging above the intersection of the two aisles where I now stood, the unanswered question hanging over my head still remained “Is “50% off any full price item” equal to or the same as “Buy 1 get one free”?
Trick question? Not at all.
On its face, my answer is YES. In reality, the answer is, it all depends on the value you place on an item and also whom you ask according to a certain retail buyer friend.
Walking into the store, the space looked different. The accent lights at the entrance made the poster sized artwork pop. The store had recently undergone some renovations. The white walls had succulents in distressed wood table troughs mounted behind the checkout registers. The ambient lighting added to the soothing atmosphere. The bold signage pointing to the accessories department was my cue. I just about sprinted to the handbag display section, somehow managing to make it, without knocking down anything or anybody in my way.
There it was. The teal blue clutch that caught my eye six months earlier.
Full Sale Price $150. The cost price of the bag $50 ( assume said store buyer friend shared that detail).
- Promotion A – Buy One get One Free! The 1st bag at $150 and get another for the same or less than $150 for free.
Profit on Sale: $150-100 (cost price of (2)bags)= $50
2. Promotion B – 50% off full sale price of 1 bag at $150/each = $75/bag
Profit on Sale: $150-100 (cost price of (2)bags) = $50
On its face it seemsI make out good either way.
For the retailer, on the other hand the sales from both promotions are analyzed differently. Under promo A,two bags have been moved off the shelf, a boost to sales velocity for that particular store. Sales velocity is a measure of how well a product sells when it is available to consumers.
Assuming the second item’s cost price was $25, the profit for the buy one get one free is $25 more
Promo A: $150 – ($50 + $25 CP of free item) – $75 profit
Promo B: $(75- 50) – $25 profit.
Aside from the fleeting euphoric feeling of acquiring a new material item, how valuable is the item to the client? This is a way for the client to evaluate if this is the right deal for the client at that price and at that time.
The client may come to the realization to hold off until they have sufficient funds to pay for the particular good or service they need, rather than make a decision driven primarily by the “reduced” sale price.
This assessment has application even in the service oriented businesses. Offering the client a way to still achieve their most important goals without all the “bells and whistles” at the price quoted by the service provider is another viable option.
This allows the provider to work with the client’s budget without selling their services short. Where the client is satisfied with the original service provided, when their budget permits, they can slways come back for the addition of the “bells and whistles.”
But as in all cases, the time commitment, scope of work and price are key considerations that have to work for both the provider or seller and the client.
Sometimes the win-win may mean both parties walking away from the negotiation table. Even at that, the service provider can make recommendations. These are referral partners that the provider highly respects and believes would be a better fit and provide outstanding value. Going this extra mile builds goodwill with not only the client but the business community at large. This approach to customer service grows the clientele base.
Moreover, the clients can choose not to go with the referral and come back when the time and their money is right. Building a reputation as a helpful resources keeps one on the client’s radar.