The practice of increasing inventory levels or adjusting the product mix during a selling season to capitalise on strong sales performance or respond to emerging trends.
What is Chasing Sales?
Chasing sales is a retail strategy that involves actively pursuing and increasing sales through promotions, marketing efforts, and sales team engagement. It aims to drive revenue and achieve sales targets. Retailers offer discounts, implement marketing campaigns, and train their sales staff to attract customers and boost sales. However, it requires careful management to maintain profitability and ensure a positive customer experience.
How Chasing Sales works
- Promotion and marketing: Retailers use various promotional strategies such as discounts, offers, coupons, and loyalty programs to attract customers and encourage purchases. Marketing efforts include advertising, social media campaigns, email marketing, and other channels to create awareness and generate sales.
- Sales team engagement: The sales team plays a crucial role in chasing sales by actively engaging with customers, providing product information, offering personalised recommendations, and upselling or cross-selling products. They are trained to be proactive and persuasive in their approach to drive sales.
- Sales tracking and analysis: Retailers closely monitor sales performance through sales data analysis, tracking key performance indicators (KPIs), and using retail analytics tools. This helps identify trends, measure the effectiveness of promotional activities, and make data-driven decisions to optimise sales strategies.
It is important to note that while chasing sales can lead to increased revenue, there are potential drawbacks such as reduced profitability due to heavy discounting, customer dissatisfaction if promotions are misleading, and increased pressure on the sales team to meet targets. Balancing aggressive sales tactics with maintaining brand reputation and customer satisfaction is crucial for long-term success.
Pros of Chasing Sales
- Promotion and marketing: Retailers use various promotional strategies such as discounts, offers, coupons, and loyalty programs to attract customers and encourage purchases. Marketing efforts include advertising, social media campaigns, email marketing, and other channels to create awareness and generate sales.
- Sales team engagement: The sales team plays a crucial role in chasing sales by actively engaging with customers, providing product information, offering personalised recommendations, and upselling or cross-selling products. They are trained to be proactive and persuasive in their approach to drive sales.
- Sales tracking and analysis: Retailers closely monitor sales performance through sales data analysis, tracking key performance indicators (KPIs), and using retail analytics tools. This helps identify trends, measure the effectiveness of promotional activities, and make data-driven decisions to optimise sales strategies.
Cons of Chasing Sales
- Profitability concerns: Chasing sales often involves offering discounts or running promotions to attract customers, which can impact profitability. Lower profit margins may result from reduced selling prices or additional costs incurred to implement promotional activities. If the focus is solely on increasing sales volume without considering profitability, it can negatively impact the overall financial health of the business.
- Potential brand devaluation: Constantly running sales promotions and chasing sales can create a perception that the products or services offered are of lower value or quality. Customers may start associating the brand with discounted prices, which can erode the brand's reputation and make it challenging to maintain premium pricing in the long run.
- Pressure on the sales team: Chasing sales often places significant pressure on the sales team to meet aggressive targets and drive higher sales volumes. This can lead to burnout, increased stress, and potentially compromise the quality of customer interactions. Additionally, if sales targets are unrealistic or unattainable, it can create a toxic work environment and negatively impact employee morale and motivation.
FAQ
Below you will find answers to common questions
How can chasing sales impact my bottom line?
Chasing sales can have both positive and negative impacts on your bottom line. On the positive side, it can help increase sales volume and revenue in the short term. However, it can also lead to lower profit margins if discounts or promotions are used extensively. It's important to carefully analyse the impact on profitability and consider factors such as the cost of promotions, potential cannibalisation of higher-margin products, and the long-term sustainability of such sales-focused strategies.
What are the risks of solely focusing on chasing sales?
Solely focusing on chasing sales can come with several risks. One risk is that it may lead to a devaluation of your brand perception, as customers may start associating your products or services with discounted prices rather than their intrinsic value. Another risk is the potential strain it can put on your sales team, as they may face increased pressure to meet aggressive sales targets. This can result in burnout, decreased job satisfaction, and compromised customer interactions. It's important to balance chasing sales with maintaining a strong brand reputation, profitability, and employee well-being.