3 Steps To Make Your Promotions More Effective With A Retail POS Solution

Businessman analyzing data on tablet

Feel like you’re in the dark when trying to track the results of your promotions? A retail point of sale (POS) solution will help to shed light on which promotional campaigns generate the most sales.

A retail POS solution is more than an efficient system for inventory management. It’s an equally powerful tool for customer relationship management. That’s where sales, promotions and discounts come into play. These tactics are essential in enticing spending from loyal customers, introducing new products, increasing sales and experiencing overall growth.

Maximizing retail POS software is vital to tracking the results of a planned promotion. Here’s a three-step approach for setting up your retail POS system to better track campaigns and determine their effectiveness. 

  1. Accurately capture a promotional sale: The ideal POS solution should give retailers the flexibility to add functions that connect current promotions, discounts or offers to a transaction. Otherwise, a cashier could input a POS command that associates the discount to something other than the current marketing promotion.

    Let’s say you ran a coupon in the newspaper that offers 10 percent off any purchase. The customer brings in the coupon, but at checkout, your retail POS system doesn’t have a feature that applies the 10 percent discount coupon to the purchase. Instead, the cashier adjusts the price. So if the purchase was $100, the retail POS system records it as a $90 transaction.

    Although the cashier inputs the correct sales margin, the retail POS system is unable to track the regular price of the purchase and the discount amount. Also, the transaction won’t include the reason for the price adjustment.

    That’s why it’s crucial to associate a transaction with a promotion to determine whether the offer generated an increase in sales. You should configure your POS system to automate promotions like straight discount offers, multi-buys, mix-and-match purchases and frequent buyer coupons. When a promotion is accurately captured in your POS system, you’ll be able to analyze and better tailor promotional campaigns going forward.

  2. Define how retail POS solution track promotions: If your store offers a “buy one, get one half off” promotion on pants, how should the retail POS system record that promotion? Without establishing a consistent tracking method, the promotion can artificially make one style of pants appear to have a higher sales margin than the other.

    Here’s how: If a cashier rings up a pair of red pants first at full price, the second pair of blue pants will ring up at a lower price because of the half-off discount. But another customer could give the cashier the blue pants to ring up first, with the red pants then ringing up at the lower price. To resolve this inconsistency, a retail POS system is able to spread the discount across the entire purchase, so each pair of pants rings up as 25 percent off.

    Consistency in tracking promotions helps to clearly correlate campaigns to their total sales, the number of customers that redeemed the promotion and the profitability of promotional items. If a promotion didn’t generate additional sales, customers or profits, then it likely wasn’t successful and should be discontinued.

  3. Analyze and adjust promotions to generate more sales: A detailed transaction history sets the stage for analyzing the effectiveness of various promotions. Compare the amount of sales each promotion generated to understand what drives your customers. For example, if a clothing retailer offers a promotion for “buy one, get one half off” for pants, does that generate more sales than a promotion for 25 percent off all pants? It’s important to carefully analyze the results of promotions to understand what deals resonate best with your customers.

In the end, linking every transaction with the correct promotion is the key to determining the effectiveness of any campaign. A retail POS solution will help to manage that relationship, which is critical for creating strategic campaigns that attract customers and generate more sales.

Author: Wm. Matthew Street, Solutions Consultant/Retail Product Lead at ArcherPoint

To learn more about tracking promotional campaigns, schedule a demo of ArcherPoint's Retail Management Solutions.