In the flower business discounting is often discouraged. But, used properly, discounts are an excellent way to motivate price sensitive retail customers into making a purchase, getting them off the sidelines and into your store. In particular they can get people buying flowers for themselves.
Flower buyers are usually buying for someone else – the flowers are a gift. There is a tremendous opportunity in turning the people that receive those flowers into customers that buy flowers for their personal enjoyment. This type of customer is likely to buy more often, but spend less money. Discounting to this type of buyer can create a new customer and increase both sales and profits.
But you don't want to discount to the customers that are already happily paying full price to send flowers as gifts. The lost profit on those sales would offset the additional profit from the new sales.
One solution involves pricing hurdles. Hurdles allow selective discounting to the customers most sensitive to price (good). We're going to look at two hurdles that also target a particular type of flower buyer – the one that is purchasing for their own personal enjoyment (better).
In this promotion the florist encourages customers to bring a non-perishable food item to the store in support of a local food drive. In return the customer is rewarded with a discount on purchases made during that visit (no delivery or wire orders).
To get the discount the customer has to jump the hurdle, in this case bringing the non-perishable food item, ensuring that only customers who are serious about saving money get to take advantage of the discount.
It's a smart way to get a discount. A few dollars in donated food might save a smart customer much more in discounted flowers – but only customers that are serious about getting a discount are likely to take advantage of it.
And, since the offer is not good on delivery orders, most people that take advantage of the offer will be buying flowers for their personal enjoyment.
It is also a great publicity opportunity for the store. They can often get some local press coverage when they launch the promotion and again when they finish up and donate the collected items to the food bank.
In this promotion the florist allows customers to bring in old containers, which the florist will then fill with a discounted arrangement.
The hurdle involves a couple of things...
the customer has to bring in the vase and wait while the florist prepares the arrangement
it doesn't apply to delivery or wire-out orders.
To take advantage of the discount the customer has to be serious about saving money. If they weren't they would be unlikely to jump over those hurdles – they would just order over the phone and pay full price. The hurdle helps ensure that you aren't giving away a discount when you didn't need to.
The hurdle also helps ensure that the customer is buying flowers for themselves. The offer isn't good on delivery orders, and it is a recycled vase – so chances are they will be taking the flowers for their own enjoyment. We know that this type of customer is likely to spend less, so discounting to get the sale is a good decision. There is also a genuine saving for the florist in that they don’t have to supply a new vase.
This promotion also lets the florist promote the "green" aspect, which can often result in positive local publicity. The florist can reach out to the local media and talk about how the promotion is good for both customers and the environment.
The best part is that it is and easy and inexpensive offer to promote. Who do you know that has a container? And recently enjoyed flowers and are probably missing them right about now?
The recipients that you send to recently. They almost certainly loved the flowers that you delivered to them, and they probably still have the container... they are the perfect candidate.
And you have all of their contact information in your floral POS system! It's very easy to use the marketing features to send them an email or postcard.