Thảo luận nhóm TMU PRESENTATION TOPIC 1 COMMON SALES TECHNIQUES

Sharing the profits with the customers Buy one, get one free marketing strategy helps your business improve the brand by sharing the profits with the customers instead of with the share

THUONGMAI UNIVERSITY ENGLISH FACULTY

BUSINESS ENGLISH 2.3

PRESENTATION TOPIC 1 COMMON SALES TECHNIQUES

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MEMBER AND TASK

1 Definition of sales technique 2.1 BOGOF

2.5 Bundling

3 Conclusion

3 Nguyễn Thị Phương Anh 19D170283 2.3 Cashback

4 Trịnh Ng c Anh ọ 19D170144 2.2 Loss leader

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TABLE OF CONTENT

2 Common sales techniques 4

2.1 BOGOF (Buy one, get one free) 4

2.1.1 What is Buy one, get one free? 4

2.1.2 How can retailers benefit from BOGOF? 4

2.1.3 Tips to run an effective Buy One, Get One Free Promotion 6

2.2 Loss leader 7

2.2.1 Definition 7

2.2.2 How it works? 7

2.2.3 When to use it? 8

2.2.4 Example 9

2.3 Cashback 10

2.3.1 Definition 10

2.3.2 How to use cashback? 10

2.3.3 Benefits 10

2.3.4 Example 11

2.4 Tying 11

2.4.1 Definition 11

2.4.2 How it works? 12

2.4.3 Benefits of tying sales 12

2.4.4 Disadvantages of tying sales 13

2.4.5 Example of tying sales 13

2.5 Bundling 14

2.5.1 Definition 14

2.5.2 Advantages of bundling 14

2.5.3 Types of bundling 15

3 Conclusion 17

REFERENCES 18

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CONTENT

1 Definition of sales technique

Sales technique is used by a salesperson or sales team to create revenue and help sell more effectively The technique typically isn’t a one-size-fits-all and is often refined through trial and error based on past experiences

2 Common sales techniques

There are many different methods to increase your sales Discounts and free coupons are effective short-term strategies that retailers use to attract more and more customers And we’ll mention some most common sales techniques below:

2.1 BOGOF (Buy one, get one free)

2.1.1 What is Buy one, get one free?

It goes without saying that shoppers like getting items for free Shoppers generally overvalue the benefits of “free” even when compared to higher-quality items at a discounted price That’s when Buy One, Get One Free (BOGOF) is born BOGOF is a proven sales tactic with many variations It creates a sense of urgency, pushing customers

to make a purchase On the other hand, a flash offer prevents customers from getting used

to buying on the discount terms Without saying, the Buy One, Get One Free strategy is a great discount technique to use to appeal to consumers

2.1.2 How can retailers benefit from BOGOF?

BOGO promotions convert better than other discounts, so your engagement rate will already get a boost To help your business boost sales and profits, we point out 3 benefits

of BOGO

a Clearing out inventory while profiting

The great thing is that BOGO promotions rarely cost anything In fact, they’re designed

to boost revenue Forget your anxiety about your less desirable inventory because BOGOF can help you get rid of them quicker but still increase your profit Instead of lowering the price of those products, just provide one item for free together with selling another at the initial price

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The shoppers’ behavior would surprise you about the difference between the two methods which seem to have similar revenue It can be explain by human psychology ed

as to shoppers, no matter how large the discount, it does not stand a chance against

“FREE" Consider this example for a moment:

Take Product A that sells for $10 and has a $2.50 cost If you sell that for a 50% discount, you’ll end with $2.50 in profit ($10 * 50% = $5 minus $2.50)

Now instead of a 50% discount, the promotion is to buy one of Product A and get another one for free The sale value is $10 now and the total cost of sales is $5, leaving $5 in profit, doubling the profit compared to the 50% discount promotion

In some cases, you can profit even more from other promotion campaigns By giving away a specific product in a sale, you can possibly move some of your older stock that you are struggling to sell otherwise As you know, some products such as garments or other things consume a lot of inventory costs So, buy one, get one is a good strategy for getting rid of old inventory and getting a new fresh cycle of inventory On the other hand, getting cash for slow-moving stock means you can reinvest that cash elsewhere

b Better Response from customers

It is undeniable that BOGO is a win-win strategy for both business and consumers es According to a recent report from AMG, 67% of consumers admit that they like BOGO the most out of all discount promotions and 95% of respondents report that they have taken benefits of BOGO promotions at least once While consumers think that they’ve got a good deal from a website, sellers get both profit and shoppers’ satisfaction which has long-term benefits for any business

c Sharing the profits with the customers

Buy one, get one free marketing strategy helps your business improve the brand by sharing the profits with the customers instead of with the shareholders Also, many a time there is no direct margin from product sales Typically, company’s profit includes how much money or revenue is received overall, and how much cost is incurred And this may work for the company to achieve other objectives of business such as market reach out, company liability, brand building etc Furthermore, it is good way to encourage trial a

or use of the product and inspire the shoppers to switch from their normal brand

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2.1.3 Tips to run an effective Buy One, Get One Free Promotion

Even as both consumers and shoppers appreciate a Buy One, Get One promotion, differences remain between a good BOGO deal and a poor one Let’s explore what you can do to set your next BOGO promotion apart from your competitors

a Find and create your target audience

Once you’ve figured out what you’re selling, it is important to know whom you’re selling

to BOGOF strategy can help you achieve one of the biggest retail goals and create loyal customers So, in order to maximize the opportunity, the best method is to find a target audience Creating a target audience can help cut costs and time because you know what you’re focusing on, rather than trying to appeal to everyone

With a target audience, you can decide what items to exhibit in your Buy One, Get One Free promotion efficiently Creating a target audience can help you win the hearts of shoppers and make a promotion efficient This will lead to better conversion rates, increased sales, and skyrocketed cash flow

b Create and maintain the urgent atmosphere in your Buy One, Get One Free period

Like any other promotion, creating urgency is essential for a successful Buy One, Get One Free promotion By setting up a deadline for your BOGOF sales, you can incentivize shoppers to act sooner due to the fear of missing out

Through an online platform, retailers can use countdown clocks to show the remaining time of the sale The clock shows the time running out and can create urgency for the shopper to purchase the item sooner rather than later

c Social media for a great Buy One, Get One Free program

Social media is growing and retailers cannot afford to ignore it In fact, in 2019, the percentage of US adults who use social media is about 79% However, it depends on your target market to use social media variably to match their usage patterns Additionally, not only can you use social media to advertise your BOGOF sales, but you can also use it to address complaints and receive feedback

Actively utilizing social media to respond to customers and share sales can be beneficial This is because 71% of consumers who have good social media service experiences with brands are likely to recommend them to others

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No doubt, BOGOF is an excellent solution to use in your conversion mix Buy one get one deal also work with more than just product-based businesses; they also are very effective for service-based businesses For example, fitness studios, spas, salons, consultants, and trainers can provide buy one get one deals on their classes or trainings to fill their schedules or attract new customers during a slow season Because the service -based businesses are more time- than product value-related, the only cost is time So especially if you have time to spare, this is a perfect strategy to try

2.2 Loss leader

2.2.1 Definition

A loss leader is a pricing strategy where a product is sold at a price below its market cost

to stimulate other sales of more profitable goods or services Specifically, in retail businesses such as grocery stores the price of a loss leader is lower than the actual cost the retailer paid for the item

The logic behind this strategy is that selling a product at an extremely low price will draw large numbers of customers to a business, and they will buy additional items while in your store, thereby making up for any loss you’ve accrued

2.2.2 How it works?

There are many ways in which a business can implement loss leader pricing, with all having a general rule in common; selling at a loss will lead to more sales Another shared trait among loss leaders is that they tend to thrive on necessity, i.e the loss leader cannot fully function without the purchase of another, more expensive product

For example, razors are usually priced quite low to entice customers to make a quick purchase However, customers must replace disposable blades after only a few uses and these cost a proportionately higher rate than the razors themselves The idea is that the razors are a one-off loss to the business and the profit made from the razor blades will recoup costs

Loss leader pricing can also work more indirectly by drawing customers in with the – offer of low-priced goods and then subtly encouraging them to make additional purchases

in the process

For example, milk is a relatively low-priced grocery and a staple in most households; many people make trips to the supermarket just for milk As such, retailers often place milk at the back of the store, forcing customers to walk past a vast array of other products

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in the process In most cases, they will end up making additional purchases as a result of

this exposure

2.2.3 When to use it?

Loss leader pricing works best for businesses looking to increase sales volumes and/or grow market share Some common case that businesses usually use this technique are:

Doing away with old stock, excess inventory

Slow-moving products can be sold at heavily reduced prices to clear out inventory and make room for newer products The clearance sale attracts crowds of customers, who will potentially feel the urge to purchase other items as well This pricing strategy can be implemented during a change in season

For example, retailers can advertise discounts on summer clothes to make way for fall and winter holiday merchandise The attractive deals entice customers to help reduce your stock of items that are on their way to being out of season

Retailers can clear inventories quickly during special days/events and quickly sell new inventory with reductions in price

For Opening New Stores

This pricing strategy can be an excellent way to attract shoppers to a new location Customers who might not enter your store might want to take advantage of a particular pricing deal This will help you build a customer base in the early stages of your store This is why loss leader pricing is also referred to as penetrating pricing Some retailers even offer free gifts to the first hundred customers in line to drive up demand and push more people into their stores

Increase Sales

When customers buy other items in addition to the loss leader, you make a larger profit based on the volume of purchases from customers By choosing your loss leaders and complementary products, you can actually use loss leaders to encourage purchases of other items in your store

A discount on ties or scarves can help entice customers to purchase a shirt Another example of a loss leader is the case of free copies magazines give with the subscription purchase

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Remain competitive

As loss leader pricing is an ideal strategy for growing market share, it works well to help acquire business from competitors Attracting customers with low-priced items can encourage them to see value in the product and opt for the same brand for future purchases

2.2.4 Example

We are all familiar with the term "Black Friday" This is the Friday immediately after Thanksgiving and is considered the opening day for the busiest shopping season in the

US On this day, almost all the stores offer discounts on their products by an average of

10% - 30% or even up to 60%-80% And definitely, Americans flock to supermarkets, waiting in long lines to get in, and even scramble to get bargains However, although the items are heavily discounted, not everyone can get it The loss leader sells at such a cheap price but the quantity is very limited, so usually the loss when selling the loss leader is nothing compared to the profit made by other products during the day

For example, at an electronics supermarket chain in San Francisco in Black Friday, if you are one of the first 50 customers, you will get a Notebook at a super discount, saving you

up to $199 And it made many customers get up very early in the hope of making a bargain In fact, this is just a delicious bait to lure customers into the store, and once they are in, the supermarket will have another way to get them to pour their wallets out to buy more

Some numbers show the hotness of Black Friday:

- Americans are 6 times more likely to shop online on Black Friday than sales on any other Friday

- E-commerce retailers reported a 240% and 380% increase in sales, respectively, on Black Friday and Cyber Monday

- Compared to a normal sales day, online traffic increased by 220% on Black Friday and 155% on Cyber Monday

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2.3 Cashback

2.3.1 Definition

Cash back, also known as “cashback”, refers to two types of financial transactions related

to credit and debit cards that have grown increasingly popular in the last two decades Most commonly, it is a credit card benefit that refunds the cardholder a small percentage

of the amount spent on each purchase above a certain dollar threshold Cashback also describes a debit card transaction in which cardholders receive cash when they make a purchase generally, a small amount above the item cost –

Cashback reward programs are also sometimes utilized directly by advertisers to incentivize their customers to purchase their products so that they may offer cashback directly from the total amount paid by the consumer

2.3.2 How to use cashback?

There are many ways to use cash back rewards once customers have accumulated a hearty balance Some of the most popular ways to redeem the customer of cash back are for statement credits, online shopping and gift cards

Certain cards also allow them to deposit their cash back directly into a bank account or use it to make a charitable donation Some cards even offer the option to use the customer

of cash back to book travel through the issuer’s own online portal

Some credit card issuers let the customer connect their cash back rewards to PayPal or Amazon.com, enabling them to use their cash back rewards to cover part or all of their purchase

Make sure customers understand all the ways their credit card allows them to redeem their cash back rewards—that way, they can put every dollar of cash back to good use

2.3.3 Benefits

Without a doubt, cashback provides cost savings for consumers when they make eligible purchases However, how does cashback benefit the credit card company?

In a cashback transaction, the credit card company would share a portion of the transaction fee (typically around 2%) generated from the merchant with the consumer Although it may appear that the credit card company is losing money on a cashback transaction, that is not necessarily true Credit card companies generate a small