How to Build Store Traffic Using the xPromote Strategy

What Is the xPromote Strategy?

The xPromote Strategy is a method for building new store traffic by collaborating with a second store that caters to a similar customer demographic.  The strategy gets its name from the fact that both stores are able to "cross-promote" their businesses with less risk than with traditional print, broadcast, or billboard advertising.  Plus, the xPromote Strategy facilitates the building of your business' fan club.  

Find out how MELCOOPER Consulting can launch and manage your xPromote campaign for you.

Here's How xPromote Works

Suppose you own a fine jewelry store and you want to reach potential customers that may not know about your business.  You could buy some expensive newspaper ad space -- or, you could launch a more targeted xPromote campaign with a non-competing partner at a much lower cost per impression.   

A good xPromote partner for a fine jewelry store might be a quality men's clothing store.  Men's clothing stores generally do not sell fine jewelry.  In fact, the closest a men's store might come to selling jewelry would be a selection of tie clasps and cuff links, but that's about it.

Once you have determined that the customer demographics for the men's clothing store are similar to your own customers, the objective of this xPromote campaign is simple.  You want to contact, or "touch", the customers of the men's clothing store with a special offer.  But to gain access to those valuable customers you must offer the men's clothing store an equally valuable incentive to collaborate with you.

The owner of the men's clothing store is as interested in building customer loyalty as you are about your own customers.  So here's your offer:  You agree to let the men's clothing store send a gift certificate for a set dollar amount (we'll discuss how to accurately determine this amount later) that is redeemable at your jewelry store.  The gift certificate will be accompanied by a letter -- written by you -- and printed on the clothing store's letterhead.  The letter will tell the customer how much the clothing store appreciates his (or her) business and "as an expression of the [clothing store's] appreciation" it has enclosed a valuable gift certificate that can be redeemed at your jewelry store.  You will pay for all the costs of preparing and mailing this letter.

Everyone benefits with this xPromote campaign.  

	You touch the clothing store's high-value customers with an offer.
	The clothing store increases the goodwill and loyalty among its own customers by virtue of sending them a free gift.
	The clothing store customers receive a free gift that amounts to actual money that can be spent at the Jewelry store.

Your cost to execute this xPromote campaign is fairly minimal considering that you are marketing to a highly targeted (and qualified) prospect list.  Plus, any clothing store customers who redeem their gift certificates will be added to your own customer list.  

The only other cost is determined at the time your gift certificates are redeemed at your store.  It is critical that the value you place on the gift certificate be enough to motivate the average person to beat a path to your store to redeem it for merchandise.  On the other hand, you should balance the actual dollar incentive against your average markup on merchandise that your store sells.  For example, if your average mark-up is 40% and your average sale is $200 then your average gross profit is $80 on a sale.  If you set the value of the gift certificate at, say, $50 you would still clear $30 gross profit on an average sale.

"But what if someone redeems the $50 gift certificate on a $50 sale?", you may be asking yourself.  Well, you can expect that to happen, but the odds are in your favor that it won't happen enough to make a difference.  In fact, studies have shown that retail sales transactions involving gift certificate redemptions are actually higher than those transactions involving "percents-off" or  "dollars-off" coupons.  In other words, customers using a gift certificate tend to spend more money on average than customers who use more restrictive coupons or incentives.

The Results of a Typical xPromote Campaign

You can expect five things to happen following a properly executed xPromote campaign. 

	You will experience more store traffic.
	You will experience more unique store traffic.  That is, you will have more first-time visitors to your store.
	Your store will ring up more sales.
	You will add more customers to your own customer list.
	Your cost per thousand for promotion/advertising will be lower compared to traditional forms of advertising.

Find out how MELCOOPER Consulting can launch and manage your xPromote campaign for you.