Episode 9: Using Data to Drive Pricing and Promotion Decisions
Episode 9: Using Data to Drive Pricing and Promotion Decisions
Hey there, store owner! Mike Hernandez back with another episode of "Smoke Break." Today, we're talking about something that might not sound exciting but can transform your business – using data to make smarter pricing and promotion decisions. Think of it as your secret weapon for boosting profits!
Let's start with sales data – it's like a map showing you where the gold is. Every transaction in your store tells a story. Which products are your bestsellers? What times are busiest? Which items often sell together? This information is pure gold for pricing and promotions.
First up, let's look at sales patterns. Pull up your reports and look for trends. Maybe energy drinks fly off the shelves early morning, or certain snacks sell better on weekends. Use these patterns to time your promotions and adjust prices when demand is highest.
Here's a practical example: if you notice a product consistently sells out by Thursday, that's not just a restocking issue – it's an opportunity. Maybe that product could handle a slightly higher price, or maybe it's perfect for a volume-based promotion.
Now, let's talk about customer feedback. Your customers are telling you what they think about your prices every day – not just with their words, but with their actions. When they consistently choose one brand over another, or when they hesitate at certain price points, that's valuable data.
Here's something powerful: basket analysis. Look at what products customers buy together. If you notice coffee and breakfast sandwiches are a common pair, there's your bundle promotion opportunity. If customers always grab chips with soft drinks, price these combinations to encourage larger purchases.
Seasonal data is crucial too. Pull up last year's numbers. Which products spiked during different seasons? Use this information to plan your promotions ahead of time and adjust your pricing strategy seasonally.
Let's talk about margin analysis. Don't just look at total sales – examine your margins by product and category. Some items might be flying off the shelves but barely making a profit. Others might sell slower but contribute more to your bottom line.
Here's something often overlooked: time-based pricing. Your data might show that certain times of day or days of the week are slower. These are perfect opportunities for happy hour specials or daily deals to drive traffic when you need it most.
About promotion tracking – don't just run promotions, measure them precisely. Compare:
• Sales volume during the promotion versus normal periods
• Total revenue impact
• Effect on related products
• Customer response and feedback
Now, let's discuss competitive analysis. Keep track of your competitors' regular prices and promotions. This data helps you position your prices strategically – not just matching competitors, but finding opportunities to stand out.
Here's a smart move: use your data to identify your MVP products – the ones that bring customers to your store regularly. These might not be your highest-margin items, but they're crucial for customer loyalty. Price them accordingly.
Technology makes this easier than ever. Modern POS systems can generate reports showing your best-selling items, peak sales times, and promotion performance. Use these tools – they're like having a business advisor working 24/7.
Let's talk about customer segments. Your data might show that different customer groups buy different products or shop at different times. Use this information to create targeted promotions that appeal to specific segments.
Here's something crucial: watch for changing trends. Maybe a product category that was hot last year is cooling off, or a new category is gaining traction. Your data will show these shifts before they become obvious.
Don't forget about waste data. Track which products often expire or go unsold. This information can help you adjust order quantities and create promotions to move products before they become losses.
Here's a question to check your understanding: Why is basket analysis important for creating effective promotions, and how can you use this data to increase average transaction value? Think about it, and we'll discuss the answer in our next episode.
Your action item for this week: Pull your sales data for the last three months. Identify your top 10 products by sales volume and your top 10 by profit margin. If they're different, create a strategy to increase margins on your high-volume items or boost sales of your high-margin items.
That's all for today, store owner! Remember, data isn't just numbers – it's insights waiting to be discovered and turned into profitable actions.
If you found this helpful, don't forget to subscribe to our channel and share it with fellow convenience store owners. And for more in-depth content, head over to cstorethrive.com.
Thanks for joining me on this Smoke Break. I'm Mike Hernandez, and I'll see you in the next episode!
