Buy one, get one free
04 November 2016 - 8:00am | devsupport
Enough time has passed since the EU referendum that the initial furore has died down, but when it comes to the economic fallout, our toes are still in the water. There remains an air of economic nervousness and it is reasonable to assume that your average consumer might be holding back on making purchases. From what we know so far, car sales are holding up relatively well; even so, the SMMTs figures suggest the fleet sector is currently in better shape than retail, so there is cause for concern.
Retailers need to ask themselves how they can convince customers to spend in a time of uncertainty, when theyre nervous and potentially unwilling to part with their cash and looking at other sectors is often the way to do it. Everyone is familiar with the way in which supermarkets bolster sales with the buy-one-get-one-free, or BOGOF, offers, which percolate the aisles at the best of times, never mind when things are tough.
Often, these arent strictly as they sound, as customers will frequently buy one product at full price, only to open the gateway to another at half the cost. The result is that the customer has two products but they have spent 50% more than they originally intended.
The same cant be said of car sales but there are ways in which such an approach can be applied in an automotive retail environment. Servicing, tyres, parts sales and finance products are prime candidates for adaptations of the BOGOF offer and theres no reason they cant be sold under the banner of buy one get 50% off the other.
Service plans are a good place to start. Theyre usually profitable and a portion of customers inevitably will not use them, so examining the number your business sells versus the amount that are used will generate a break-even point. If you can make the figures stack up, theres a solid case for offering service plans at half price for, say, three months, provided that customers buy another product at full price.
In a time such as this when there is an air of nervousness and buyers are reluctant to part with their money, it makes sense to asses the other areas of your business you can promote that are likely to drum up good revenues, particularly those with high profit margins in the first place, as theyre the services on which you can afford to take a hit, albeit for a limited period.
It might initially seem cost-prohibitive to sell good-earning products at a discounted rate but the offer has to be appealing to the customer. If you can create a good looking package then chances are it will fly off the shelves, as they might say in the supermarket.
Author Martin Dowding is business development manager of MSX International, a commercial partner in Auto Retail Bulletin