It’s a good bargain, where both are winners. – ProverbsWith two sets of grandparents growing up in tough economic times and working very hard to survive and get ahead along with a mom and dad who worked equally hard to start companies from the ground up, I learned the value of money at an early age. I was taught the basic principal of working hard and smart. I am grateful to have these traits carved into my character.
I have seen firsthand the importance of offering specials and bargains. Hawai‘i is already good about this, but I suggest going further. Below are a few examples to help professionals generate additional revenue and customers.
Kama‘aina Discount: Giving the Hawai‘i resident a favorable discount (usually offered at most visitor attractions, hotels and some food venues) builds local loyalty and brings in additional customers. Numerous businesses already offer this year-round.
Buy One Get One: Many businesses target residents in the slow season with buy-one-get-one-free promotions. While this is probably the most attractive to the consumer, check your price points and make sure you will remain profitable. However, keep in mind, having a loss leader sometimes is a financially sound decision, because you will make it up on the backend.
Buy One Get One Half Off: Not a bad deal. If I saw this ad in the paper, I would strongly consider this option and it would likely win my favor over other options. It might seem like a better choice for the business owner, but not necessarily. What if your potential customer went for the buy-one-get-one-free instead, and they never walked through your door? Again, run your financials, make projections and conduct a trial run. What works for another may not be the right solution for you.
While these are just a few examples that we commonly see, you may tailor-make your own creative promotion. I encourage you to know where your customers come from. Implement a tracking system and train employees to track consumer origination. A sharp business owner should know exactly where his/her customer base breakdown. A good POS (point-of-sale) system can help with this, and generally will yield a return on its investment over a short period of time, if you maximize utilization.
Try an option that fits your product or service offering, channel your marketing and do the math. You will drive revenue, bring in customers, build loyalty and turn profit. Don’t be afraid to explore promotions where you use loss leaders and cut your profit margins for locals. The end result should be no loss at all!
This is wise business.
Chevy Tharp is regional vice president, Hawaiian Islands and Western U.S., for Meridian Business Brokers & Meridian Group Hawai‘i. Tharp is an international business consultant and business broker who specializes in helping people buy, sell and improve businesses. He welcomes you to contact him at chevy@mghawaii.com or (808) 268-6131.