Question

Topic: Strategy

Innovative Alternative To A Successful Strategy

Posted by deepthi.varghis on 11/15/2011 at 1:44 AM ET 250 Points
HI ALL.
WE ARE A RETAILER FOR LUCURY WATCHES AND WE HAVE BEEN VERY SUCCESSFUL WITH A SALES STRATEGY WHERE WE GIVE CUSTOMER HALF VALUE BACK ON CURRENT PURCHASE IN FORM OF VOUCHERS WHICH HE CAN REDEEM ON HIS NEXT BUY!. THIS HAS BEEN THE BEST PROMO SO FAR BUT WANTED TO SORT AN EQUIVALENT YET BETTER ALTERNATIVE FOR THIS.. we'v been brain storming.. but not able to come up with something.. looking forward to great ideas from you guys.. :):)
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RESPONSES

  • Posted by Peter (henna gaijin) on 11/15/2011 at 9:40 PM Accepted
    Your successful strategy is basically discounting. Effectively, you have them buy one at regular price and get 50% off a second item. So it helps you sell a lot of watches, but at a large cost to your profitability.

    Are there limits on the vouchers you give? Say they get $100 in vouchers - can they buy an item for $100 and not pay anything? If there are no limits like this, a better solution would be to set it so they buy one item now and get the second item (also now) at half off. The second (half-price) item would be the lower price item. The benefit of this is that you don't risk selling that second item at less than 50% of retail.

    Better yet would be to not compete on pricing, but to compete on service or quality. This way you can charge closer to the full price for the watches rather than discounting.
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