Cash flow can be a tricky issue for business owners. One month, a business may find itself overloaded with work, only to have demand dry up the next. Unfortunately, landlords and suppliers expect to be paid, even when sales are at their lowest. While there is nothing businesses can do to force customers to spend, there are incentives they can offer that may increase traffic during those low-volume months.
While you can’t prevent low-volume months entirely, you can prepare for them and mitigate their effects on your business. The first step toward combating cash flow slumps is to determine when those slumps occur.
If you’ve been in business for more than a few months, review your financials and pinpoint those times when income was down. You can then focus your efforts on increasing sales during those months. Through special promotions, you can win new customers, as well as encourage existing customers to spend during a time when they normally wouldn’t.
After you’ve done that, here are three more important steps to help you increase sales during slumps.
When It Comes to Promotional Offers, Timing Is Everything
Businesses across all industries encourage customers to shop by reducing prices. For retailers who suffer slow periods, this is often done through clearance sales or coupons. A store that deals with slow business in the months just after the end-of-year shopping rush, for instance, may do a seasonal storewide clearance. Now that you know that, there’s no time like the present to start promoting for the future.
Heavy traffic during busy months gives businesses the perfect opportunity to promote future special deals in the weeks following those busy months. Since your customers have already got a good look at the items you have for sale today, they’ll have an idea of what might be on sale tomorrow.
Consider providing coupons at checkout during those busy months with validity periods beginning in a week or two after the current date. This encourages the customer to come back.
This technique can be employed both in-store and through e-commerce sales, but make sure the terms of the deal are obvious at the time of checkout. Also, if your business collects contact information on your customers and allows them to opt in to receive notifications of special offers, time those notifications for the slow periods of the year to bring in extra money.
Make Sure Your Offer Is “Going, Going, Gone”
Some businesses seem to exist in a constant “biggest sale of the year” mode. However, customers pay attention. If they know today’s sale will just be a different sale next month, you’ll be far less likely to see results.
Instead, save your promotions for those times of the year when you’ll need them most. Make sure customers see them as limited time offers. This can be done by either attaching an expiration date to the promotion, or naming it by the number of days it will last, such as “the seven-day sale.”
Be aware, however, that the “biggest sale of the year” promotion concept can work. When you schedule one big sale each year and promote it properly, your customers will start to look forward to it. If you have a time of the year that sees especially low sales, this technique could be a great way to keep things going year round.
Market Your Promotion
Even the most attractive sale will be unsuccessful if customers do not know about it. Plan your marketing strategy well in advance, and build your platforms to ensure you’ll reach as many people as possible.
One way to do this is by slipping physical coupons in with customer purchases or sending digital ones by email following an online purchase, as mentioned above. Keep in mind, however, that this will limit your reach to only those customers who already buy from you.
Social media is a great way to reach a large group of potential customers, but it can be difficult to get your message across in such a crowded marketplace. Find ways to encourage your followers to share your promotion with their followers through contests and referral fees. The more creative you are with this, the better your results will likely be.
If your business goes through slow periods, you can boost cash flow and improve your bottom line through the use of promotions. With the right marketing push, you’ll be able to spread the news of your promotion through social media and referrals. While you may have to discount your products slightly to see results, you can likely strike a balance between a deal that will interest customers while still making a profit on your sales.