Thảo luận nhóm TMU PRESENTATION TOPIC 1 COMMON SALES TECHNIQUES

THUONGMAI UNIVERSITY ENGLISH FACULTY BUSINESS ENGLISH 2.3 PRESENTATION TOPIC COMMON SALES TECHNIQUES Lecturer Group Class TIEU LUAN MOI download : skknchat123@gmail.com MEMBER AND TASK No Member Phạm Thị Thùy An Vũ Thị Hải An Nguyễn Thị Phương Anh Trịnh Ngọc Anh Hoàng Thị Ngọc Ánh TIEU LUAN MOI download : skknchat123@gmail.com TABLE OF CONTENT Common sales techniques 2.1 BOGOF (Buy one, get one free) 2.1.1 What is Buy one, get one free? 2.1.2 How can retailers benefit from BOGOF? 2.1.3 Tips to run an effective Buy One, Get One Free Promotion 2.2 Loss leader 2.2.1 Definition 2.2.2 How it works? 2.2.3 When to use it? 2.2.4 Example 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 Conclusion 17 REFERENCES 18 TIEU LUAN MOI download : skknchat123@gmail.com CONTENT 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 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 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 TIEU LUAN MOI download : skknchat123@gmail.com The shoppers’ behavior would surprise you about the difference between the two methods which seem to have similar revenue It can be explained by human psychology 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 businesses and consumers 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 a good way to encourage trial or use of the product and inspire the shoppers to switch from their normal brand TIEU LUAN MOI download : skknchat123@gmail.com 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 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 TIEU LUAN MOI download : skknchat123@gmail.com 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 TIEU LUAN MOI download : skknchat123@gmail.com 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 TIEU LUAN MOI download : skknchat123@gmail.com 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 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 TIEU LUAN MOI download : skknchat123@gmail.com 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 10 TIEU LUAN MOI download : skknchat123@gmail.com transaction fee from merchants when consumers use their credit cards As a result, credit card companies provide cashback on their credit cards to incentivize consumers to use their credit card (which generates fees for the company) more often over cash or debit card (which does not generate fees for the company) Furthermore, consumers may overspend on their credit cards due to the attractiveness of the cashback, providing greater interest payments for credit card companies from overdue payments Lastly, credit cards with cashback may have an annual fee, providing additional revenue for credit card companies 2.3.4 Example Shopee is one of the largest e-commerce or shopping platform in Southeast Asia and Taiwan, similar to Lazada and Zalora It introduced several incentive programs to increase sales, such as: Exclusive Shopee promo codes, Shopee discount codes, Shopee free shipping vouchers, Shopee farms, Shopee cashback, Special incentive on first order for new users, … The Shopee Cashback program was introduced to help sellers drive more sales by giving buyers the Shopee-sponsored 10% or more coins cashback Sometimes there is a minimum spending amount required to qualify for this voucher During a particular promotion period, no minimum spending amount is set The customer will receive cashback in the form of Shopee coins to offset customers’ future purchase 2.4 Tying 2.4.1 Definition Tying (informally, product tying) is the practice of selling one product or service as a mandatory addition to the purchase of a different product or service A variation is a total coercion in which a seller forces a complete product line on a buyer, who is primarily interested in a particular product In legal terms, a tying sale makes the sale of one good (the tying good) to the de facto customer (or de jure customer) conditional on the purchase of a second distinctive good (the tied good) Tying is often illegal when the products are not naturally related It is related to but distinct from freebie marketing, a common (and legal) method of giving away (or selling at a substantial discount) one item to ensure a continual flow of sales of another related item 11 TIEU LUAN MOI download : skknchat123@gmail.com 2.4.2 How it works? Tying commerce is divided into types: Horizontal tying is the practice of requiring consumers to pay for an unrelated product or service together with the desired one A hypothetical example would be for Bic to sell its pens only with Bic lighters (However, a company may offer a limited free item with another purchase as a promotion.) Vertical tying is the practice of requiring customers to purchase related products or services together, from the same company For example, a company might mandate that its automobiles could only be serviced by its own dealers In an effort to curb this, many jurisdictions require that warranties not be voided by outside servicing Tying is often used when the supplier makes one product that is critical to many customers By threatening to withhold that key product unless others are also purchased, the supplier can increase sales of less necessary products Moreover, tying is mostly illegal when the products sold together are unrelated, although there are exceptions The reason is based on the fact that consumers are harmed by being forced to buy unnecessary goods, just to get the right to buy the goods they are wanting Companies are able to make a tying sale because they have market share strength, high demand, or a critical product nature that can outweigh the market competition In such a case, tying sale can enable substandard products to be manufactured and their market share to increase In addition, tying may also be a form of price discrimination: people who use more razor blades, for example, pay more than those who just need a one-time shave Though this may improve overall welfare, by giving more consumers access to the market, such price discrimination can also transfer consumer surpluses to the producer Tying may also be used with or in place of patents or copyrights to help protect entry into a market, discouraging innovation 2.4.3 Benefits of tying sales First of all, tying sales combine products and can provide customers with a lower price than the individual purchase price of each item as well as a favorable price, and a lower price if the customer uses more of the good or service more business services Secondly, tying sales can be used as a form of price discrimination by assisting banks (or other businesses) in consolidating a customer's business with a single supplier It can also 12 TIEU LUAN MOI download : skknchat123@gmail.com discourage competition by favoring larger, full-service firms over smaller, singleservice firms or firms with fewer product lines, such as startups Thirdly, tying can benefit consumers with the convenience of buying multiple items at once because this technique can reduce the cost of packaging, shipping, and promoting a manufacturer's product Furthermore, as a result, the manufacturer will offer a discount on the packaging of related products (such as a cheaper fast-food value meal if their component parts are purchased separately, or the price, fee, or condition) When multiple services are used, the bank account is more advantageous than the product) Lastly, Constraints can also result in better service or product experience for consumers, such as if a computer manufacturer restricts the use of a particular type of peripheral hardware or software because of post-processing options which may forever create mistakes or damage their products 2.4.4 Disadvantages of tying sales Tying sale of one product to the purchase of another competitor's product may be anticompetitive and trade-restrictive in other countries, particularly the United States In its most basic form, a constraint occurs when a seller asks a buyer to agree that if the seller sells product A, the buyer may only purchase product B from the seller The conduct must have a significant commercial or commercial impact to be considered illegal Sellers often need to have the significant market power to have a significant impact on trade Besides, Tying is sometimes used to discriminate against prices Concerns have been raised about how tying may reduce opportunities for other companies to sell related products or raise barriers to entry for those who not provide adequate product lines 2.4.5 Example of tying sales Apple products: The tying of Apple products is an example of commercial tying that has caused recent controversy When Apple initially released the iPhone on June 29, 2007, it was sold exclusively with AT&T (formerly Cingular) contracts in the United States To enforce this exclusivity, Apple employed a type of software lock that ensured the phone would not work on any network besides AT&T's Related to the concept of bricking, any user who tried to unlock or otherwise tamper with the locking software ran the risk of 13 TIEU LUAN MOI download : skknchat123@gmail.com rendering their iPhone permanently inoperable This caused complaints among many consumers, as they were forced to pay an additional early termination fee of $175 if they wanted to unlock the device safely for use on a different carrier Other companies such as Google complained that tying encourages a more closedaccess-based wireless service Many questioned the legality of the arrangement, and in October 2007 a class-action lawsuit was filed against Apple, claiming that its exclusive agreement with AT&T violates California antitrust law The suit was filed by the Law Office of Damian R Fernandez on behalf of California resident Timothy P Smith, and ultimately sought to have an injunction issued against Apple to prevent it from selling iPhones with any kind of software lock Taking another example, one automaker that bundles tires with the cars it makes, and another automaker that already has a sale agreement in place that the customer purchasing the vehicle will receive a repair kit with brand-specific cures (Toyota) Manufacturers of repair tools point out that the market for repair tools already exists on its own As a result, the car manufacturer has the ability to make a legally binding sale to the customer who purchases the vehicle Meanwhile, the tire manufacturer is unable to make this argument because tires, regardless of brand, are required for the marketing of a vehicle, and there is no market for tires without a vehicle 2.5 Bundling 2.5.1 Definition Bundling is a technique in which several products are grouped together and sold as a single unit for one price This strategy is used to encourage customers to buy more products McDonald’s Happy Meals are an example of bundling Instead of selling a burger, soda, and french fries separately, they are sold as a combination, which leads to more sales than offering them separately 2.5.2 Advantages of bundling Increase your average order value Bundling can increase the profits and sales of individual items over time By grouping your items together you can make your customers buy more than one product during a single purchase, which increases your average order value 14 TIEU LUAN MOI download : skknchat123@gmail.com Decreases marketing and distribution costs Bundling enables you to sell more and decrease marketing and distribution costs Instead of marketing every product you can group complementary products together and market them as a single product By packaging different items together you only need one warehouse bin to store them instead of different bins Also, bundling helps you ship fewer boxes of individual items and saves you money on postage Instead of making print and web ads for every single item, you can show them as a bundle which helps you save more on your marketing costs and at the same time markets all your products Reduce inventory waste Merchandise that doesn’t get sold remains in your inventory as deadstock, adding to your holding costs, and is eventually discarded as waste You can use bundling to clear out this dead stock before it becomes a problem If you bundle a slowmoving or stagnant item with a faster-selling product, customers will see the bundle as a bargain and be more inclined to buy it This helps reduce your inventory waste, free up warehouse space, and decrease your inventory holding costs 2.5.3 Types of bundling There are several different bundling techniques which are used to group products: Pure bundling In pure bundling, the individual products that make up the bundle can be purchased only as a bundle and not as standalone products This technique limits the choices offered to the consumer For example: HelloFresh is a company which does pure bundling successfully It bundles the ingredients that their customers need to cook a healthy meal They offer meal options based on the number of people and recipes the customer requires each week, but they don’t allow you to choose the ingredients as individual items that can be bought separately New product bundling In this technique, newly-launched products are grouped along with existing or popular products as a promotion to help customers discover your latest product This method is used by e-commerce stores, which mix new products with their well-known merchandise 15 TIEU LUAN MOI download : skknchat123@gmail.com to gain some exposure for the new product The more well-received the existing product is in the market, the more it brings the buyer closer to the new product For example: The Nintendo switch + the legend with Zelda product bundle, is one of the fast-selling Nintendo’s bundle, in this bundle Nintendo introduced their brand new games which is grouped together along with their existing best selling products This bundle offers an unique Zelda carrying case which is available with this bundle exclusively and two brand new games (Breath of the wild and Super Mario Kart) along with the accessories for gaming Mix-and-match bundles The mix-and-match bundling technique allows the customer to choose among multiple similar products This is mostly done by brick-and-mortar stores for fastmoving consumer products such as perishables or bulk items Here, you specify a few products for your customers to choose from and they can create their own custom bundle from the options available This method helps the customer feel that they’re in direct control of what they want to buy, thereby increasing the perceived value of the item It’s the perfect method for encouraging your customers to buy products in bulk without forcing them to buy items which don’t interest them For example: some retail stores offer a deal where you can match complementary pieces of clothing from an array of choices for a fixed price, such as any shirt along with any pair of trousers for $50 Cross-sell bundles In this bundling technique, retailers sell a complementary product as an add-on to a main product This type of bundling works well with lower-priced items, or accessories or parts that go with a more expensive item For example: If you buy an iPhone, you would probably like to buy a case along with it So the iPhone and case can be sold together as a bundle Gifting bundles Gift bundles are aimed at shoppers who want to give a bundle of complementary products together to a loved one This type of bundle is mostly sold during holiday seasons 16 TIEU LUAN MOI download : skknchat123@gmail.com For example, beauty brand Estee Lauder offers a popular protect-and-hydrate gift set containing four skincare products that work together Inventory clearance bundling In this bundling technique, you pair a faster-moving item in the inventory with a stagnant or slower-moving item to clear inventory space and decrease your inventory holding costs This method includes discounts on your bundles so that shoppers who are interested in a top-selling item will see the whole bundle as a bargain and will be more inclined to buy it For example, the popular specialty tea retailer T-WE found out that their tea accessories were selling faster than their teas (which was unfortunate, because the teas offered a higher profit margin) So they started to bundle their teas along with the accessories so that they look like more of a deal Bundling adds value to your products by adding extra features or products to your existing purchase You can tailor your product offerings according to the preference of your customers to align with their wants Offering unique and carefully curated bundles can help you stand out in comparison with your competitors It clears out your aging inventory, increases your items’ perceived value in the eyes of your customers, and boosts sales Conclusion Common sales techniques will help you to improve how you sell, sharpened with situational awareness to know when and how to adapt to each situation Whatever your career goals are, by incorporating the sales techniques as daily habits you will experience more success You will be more effective in building value driven relationships, you will be more influential in spreading your ideas, and you will more consistently earn the trust of those around you 17 TIEU LUAN MOI download : skknchat123@gmail.com REFERENCES Buy one, get one free: The marketing strategy to boost sales for ecommerce https://smallbiztrends.com/2020/01/what-is-a-loss-leader.html https://www.livemint.com/money/personal-finance/do-cashbacks-help-you-saveor-are-they-just-a-marketing-gimmick-1549387205239.html https://blog.commissionfactory.com/affiliate-marketing/cashback-101 https://www.dnse.com.vn/hoc/cashback-la-gi https://luatduonggia.vn/ban-corang-buoc-la-gi-dac-diem-va-vi-du-ban-co-rang-buoc/ https://slideplayer.com/slide/6896420/ _END_ 18 TIEU LUAN MOI download : skknchat123@gmail.com ... 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. .. 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 ... download : skknchat123@gmail.com TABLE OF CONTENT Common sales techniques 2 .1 BOGOF (Buy one, get one free) 2 .1. 1 What is Buy one, get one free? 2 .1. 2 How can retailers