Promotional pricing is a pricing method where a company temporarily reduces the price of a product or service in the interest of quickly driving sales. In most cases, those deals and discounts are supported by a dedicated promotional material or marketing campaign. A promotional pricing strategy is one of the best ways to get a tow truck business back in getting sales quickly and raving up revenue numbers. Efforts put on promotional pricing are normally confined to a tight time frame with extensive promotion. It creates a sense of urgency, with the impression that customers will be missing out if they don’t buy soon.
Promotional pricing is quick hitting and an effective practice that is generally best done in doses. In most cases, businesses will normally undertake large scale promotional pricing efforts that may lead up to excessive cutting of profit margins leading to customers to expect lower prices regularly. The pricing strategy is normally associated with industries mostly in retail and commerce. However, there are different promotional pricing strategies that can suit virtually every business. Here are some of the most prominent promotional pricing strategies you need to know.
A flash sale happens when a business, typically in ecommerce or retail, offers substantial discounts on their products or services within a relatively short time frame. An example is how Amazon annually puts on Prime Day, which is a two-day event where it offers a wide range of deals, spanning virtually every category of products the site covers. The vast majority of Prime Day deals are not offered year-round, and this makes the two-day window a specific and exclusive point for those bargains. Since those discounts are collectively isolated and advertised to generate some quick demand, they will constitute to a flash sale, in what we call promotional pricing.
A loyalty program is a promotional pricing strategy where a company incentivizes brand loyalty by offering deals and discounts in exchange for consistent and repeated purchases. Customer acquisition is normally more expensive and labor intensive than retaining current ones. That is why it is important to implement a loyalty program as it can turn out to be a savvy and cost-effective way for businesses interested in consistently generating revenue from dedicated consumers. The term customer loyalty program covers a wide range of practices. It could be anything from a major airline leveraging to a local shop that sells burgers and has implemented a loyalty program for its customers.
Finding the right promotional pricing strategy for your business will largely rely on some key factors or why, how and when. You need to be sure of why you are implementing a promotional pricing strategy. It is important to have a high-level understanding of what you want out of your promotional pricing strategy. You then need to figure out how you want it to be implemented. What kind of promotional budget will you be working with? Lastly, the aspect of when determines the timing. It will also define the promotional duration and time of the year.