On July 12, hordes of parents and their kids lined up in front of Build A Bear Workshop stores throughout the USA to take advantage of the limited time “Pay Your Own Age” sale.
The stuffed animals, typically selling for $15-$30 apiece, could be purchased for as little as one dollar.
Naturally, the promotion lead to crowds, chaos and tears. The stores had to end the promotion early due to fire hazards, limited supplies and overall mayhem.
People are calling this promotion a “fail.”
I think they’re wrong.
Was It Worth It?
Offering unusually low prices brought huge crowds to Build-A-Bear. Those who managed to snag a bear today will likely return to the store to purchase clothing and accessories for full price. Kids who went home without a bear today may persuade their parents to make a return trip once the dust settles.
With over 400 stores around the world, we can assume that Build-A-Bear will not suffer a huge loss for honoring this promotion, even if only small percentage of customers come back to buy accessories and upgrades.
But I know you’re not hearing about this fiasco for the first time on my blog.
Everyone is talking about this. Related hashtags are trending on all social media networks, and the memes are absolutely golden.
I’m absolutely certain that Build A Bear is going to be able to make a massive return on the bears they gave away for a few bucks. I just wonder if they were expecting this wildfire of coverage – or if they didn’t realize that people would line up around the block to get a bear at a deep discount.
Cutting Prices Without Killing Your Profits
You’re not Build A Bear. You don’t need to slash your prices to bring in new customers. Deep discounts attract discount shoppers – not loyal customers who will come back to your business and pay full price.
Sometimes, reasonably priced promotions can nudge potential customers into giving your business a try. If they’re delighted with your offerings, they’ll come back and happily pay full price.
Make sure you’re promoting your discount to qualified customers – that is, people who likely can afford and would want to pay full price after the sale.
For example, don’t set up a Groupon. Not only do you have to discount your product or service for 30-80% off, but a percentage of each sale goes to Groupon.
While some Groupon users like to try out new experiences and end up becoming loyal customers to their favorite services, many will only return if they can pay through Groupon.
You’re better off creating the promotion on your own and being selective about who you advertise it to. You can offer it to customers of adjacent businesses, your social media followers, and the publications that your customers love to read.
Planning Profitable Promotions
If you are going to slash your prices, you might as well make the news. Make sure to put out a press release to get coverage by local media outlets, trade publications and journalists.
Do take a hint from Build-A-Bear and get creative about your promotion. Consumers are exposed to dozens of sales for x% off all day long on the web.
When someone makes a purchase through your sale, don’t miss the opportunity to make your next sale. If you offer a service, encourage your customer to schedule their next appointment for another small discount. Let them know that they can learn about upcoming sales through your email list and social media pages.
You can also run contests and giveaways to promote your business without offering discounts on your prices. Make it fun! Saving money is great, but it’s not exciting. Build a creative campaign that people will be excited to post about on social media.
Most importantly, deliver the same value to all of your new customers, whether they’re paying full price or not. Great customer service is free, and people won’t mind paying a fair price when they’re delighted with what you have to offer.