Times are tough, with the cost of everyday needs (gas, utilities, groceries, etc.) getting more expensive with each passing month. When money is tight, it can feel impossible to expand your business. But there are still opportunities out there. With the right strategies in place, you can find ways to increase sales by attracting new customers and convincing existing customers to spend more.
Listed below are 5 tips to boost sales during harsh economic conditions.
- Offer a range of payment options
When your customers are looking to cut back on expenses, don’t add extra obstacles by limiting how they can pay. You want to create a seamless shopping experience from their first impression of your product to the final transaction.
That means offering a wide range of payment types and options. This includes the actual payment method, going beyond simple bank transfers and credit cards to accommodate mobile payments and digital wallets, and offering financing options to make purchases on credit, including services like buy now pay later (BNPL). BNPL is a form of short-term credit that is growing in popularity. As the name suggests, it allows customers to purchase without paying a single lump sum upfront. Instead, they agree to a financing plan, paying off the amount owed in a series of installments over a fixed period.
Beyond D2C markets, many businesses have to facilitate long-lasting B2B relationships by offering services on credit. A form of payment growing in popularity for B2B transactions is ACH withdrawals. If you’re wondering what an ACH withdrawal is, it stands for Automated Clearing House—a network enabling the safe transfer of funds between bank accounts. ACH withdrawals are great for recurring vendor payments where the amount varies with each transaction. By automatically updating the amount owed, businesses can pay for regular but variable supplies quickly and easily without extra admin.
- Real discounts
Offering discounts can increase sales by enticing first-time customers and convincing existing customers to spend more. New deals and other incentives help consolidate purchasing intent even in difficult financial conditions. This could mean packaging multiple products for less than the combined price, adding complimentary items to orders that meet a specific threshold, or including after-purchase bonuses.
However, discounts also reduce margins, meaning you get less back for your efforts. Therefore, before offering money off, ensure you have gone through the numbers to remain profitable. Have a clear strategy in place as to what you hope to achieve with each promotion.
Are you looking to reward repeat customers, reduce turnover and prevent people from leaving for competitors? Do you want to attract new customers or use a discount as part of a marketing strategy? All of these are valid, but they have to be part of a coherent business strategy that produces long-term growth rather than a short burst of purchases you barely break even on.
- Perceived discounts
While discounts help boost sales, it’s possible to work the numbers in a way that customers feel like they’re getting a great deal with less impact on your profit margins.
An easy way to do this for physical goods is to play around with the shipping fees, since people just don’t like paying for shipping. It is seen as lost money on top of the order from which they are getting no value. Therefore, by incorporating shipping costs into the original price and offering “free shipping,” you can trigger more sales. Additionally, you can increase the average order size by adding a threshold above which shipping is free.
There are other psychological tricks you can utilize to introduce a perceived discount in the mind of your customers. Simple strategies include introducing comparisons to other products or inflating the internal reference for a product in a way that the actual price looks more favorable.
- Upselling and cross-selling
Finding new customers for your product is significantly more challenging than selling to existing customers. You’re shouting at a busy street of people rather than preaching to a smaller audience who’ve proven they are interested.
Upselling and cross-selling are great ways to generate additional sales from your existing customers or increase the value of each transaction.
- Upselling is the process of convincing a customer to buy a more expensive product. Think of a waiter talking you into the lobster when you initially tried to order a salad.
- Cross-selling refers to convincing a customer to purchase additional or complementary products on top of the existing order. Think of a waiter going through the extra toppings you can add to your chosen salad.
Upselling and cross-selling are possible both in person and online. When a customer clicks on a particular product, you can add a section showing higher-quality (more expensive) products and their benefits or add potential extras to improve or supplement the product in question. For example, every Amazon product page now includes a “Buy it with” section suggesting items that are commonly bought with the original product.
If you haven’t already, you should do a detailed shopping cart and order analysis of your online store, identifying the connections between the products customers usually buy. While many links will be obvious, with real-world customer data to help, you can optimize your upselling and cross-selling capabilities for the future.
- Retaining customers
Upselling and cross-selling focus on existing customers; ultimately, when times are tough, retaining customers is more important than attracting new ones. It can be easy to get lost in expanding your customer base. But when this comes at the cost of existing customers, you’re doing yourself a disservice.
If difficult economic conditions lead to a lack of new customers, use your staff’s time and energy to work on customer satisfaction. Understand how people interact with your products and how you can improve their overall experience. Happy customers lead to long-lasting business relationships and word-of-mouth recommendations that can be invaluable.
Overcoming trying economic times
The economic outlook doesn’t look great, and people are struggling to get by. But businesses can’t waste their time and energy fretting about the future. Instead, they need to be proactive, finding ways to develop their value proposition or introduce new strategies that positively affect sales.
These five tips are a great starting point for businesses needing some inspiration at the moment. Also, remember the markets are constantly changing. If you can boost sales when times are tough, imagine what you can do when your target audience isn’t watching every penny they spend.