Consumers walked in a discount wonderland last year — one that left retailers out in the cold.
Sales may have increased over the 2016 holiday season, but as Retail Dive pointed out, this increase masks the fact that many retailers struggled to connect with customers.
Part of this struggle was a result of the American Presidential Election ending so close to the holiday season. Many marketers struggled to find the right tone after such a divisive event.
But the bigger problem was the reliance on deals and discounts to drive sales.
This reliance on deals and discounts may have driven a short term boost in sales, but it likely didn’t help brands build additional loyalty or brand equity — rewards they could reap year-round.
Tip #1: Combine Discounts with Emotional Marketing to Capture Brand Loyalty and Sales
Industry news talked a lot about authenticity and emotional appeal over the holiday period. These were labelled as “good” marketing strategies, while discounts and deals got a bad rap.
However emotional marketing and discounts aren’t necessarily opposites.
Think about it like this: if you create a brand experience that’s fun for consumers, why not target them with personalized discounts or deals while they’re already feeling positive towards your brand?
This is a common strategy with game-based sweepstakes and promotions. You create a fun, addictive game. Then hand out coupons as instant win prizes, or send targeted offers consumers can redeem to earn more chances to win.
Instead of just sending out a pile of coupons to your email list, suddenly you are using discounts to nurture already engaged customers. And you can bet they’ll be more likely to use your coupon than the dozens of other ones sitting in the “promotions” tab of their inbox.
Tip #2: Don’t Aim for One Sale; Increase Basket Size with Targeted Offers
Take your holiday campaign one step further, and use your discounts to increase basket size instead of just capture sales.
I’m not talking about BOGO deals either; those are everywhere during the holiday season.
Instead, send targeted offers based on your consumer’s data. One way to do this is with a product recommendation quiz. Guide consumers to the right product based on their inputs. Then instead of sending a coupon for the main recommended product, send coupons for related products.
For example, if your quiz recommends the consumer purchases a new FitBit, target them with coupons for an additional wristband — not the FitBit. This lets you use the same coupons or discounts you would normally offer — just in a more targeted way to increase basket size.
Tip #3: Encourage Brand Advocacy on Social Media
Word of mouth is still one of the most influential aspects of consumer purchase decisions. Encouraging brand advocacy over the holidays can help bring in more customers — and improve your existing relationships with loyal customers.
But to encourage brand advocacy, you need to give customers a reason to share.
Adding referral options to your holiday marketing campaigns can help spread the word — but only if you reward customers for sharing. Keep in mind rewards don’t necessarily need to be financial -- if you're running a game-based promotion you can reward referrals with more opportunities to play or entries for your grand prize.
The Bottom Line
Emotional marketing and discounts don’t have to be on opposite ends of the holiday marketing spectrum.
Smart marketers know that combining the two can result in an explosive holiday promotion that drives both sales and brand loyalty.