In early 2012, JCPenney totally revamped its marketing strategy. They went from aggressive sale events and coupons to what they called “fair and square” everyday pricing. The concept was to have all merchandise in their stores on sale every day at the lowest possible price. At about 40% off retail throughout their stores, their everyday low prices were often lower than the perceived dramatic mark down and enticing coupon promotions that their customers had come to expect. As you might suspect, this marketing experiment was a dismal failure. Sales plummeted by more than 20% and the JCPenny marketing team was at a loss as to how to proceed.

Research has shown over and over again that women find coupons, sales promotional codes, and other time-sensitive incentives to be not just relevant, but essential to their buying habits. A recent study by Burst Media found that moms in particular are likely to click to get coupons as the primary way of selecting where they are planning to shop at any given time. In fact, in key demographics, up to 55% of customers make it part of their daily routine to look for coupons and discount promotional codes.

JCPenney’s precipitous drop in sales was no surprise to anyone except JCPenney. The everyday low price strategy was the brainchild of Ron Johnson who has been credited with big successes like Target and the Apple Store. Why didn’t Johnson consider that female customers, who make up more than 67% of mall purchasers each year, were primarily motivated by the “perceived value” of short-term promotions and that women were willing to wait for them?  According to Britt Beemer, chairman of America’s Research Group, “When you train customers to shop at big discounts, those customers are not going to change.” So where did Ron Johnson go wrong? In the case of Target and The Apple Store, he had the chance to build the brand from the very beginning. In that way, he defined the customer, and then marketed to them. Mark Ellwood, whose book, Bargain Fever articulates just this point when he wrote “Customers still want the thrill of the hunt—it’s hunting and gathering with a credit card. In fact, no consumers have been complaining about discounts so why rock the boat? Everyday low prices lack excitement. In general, no excitement means no sales.” This is what JCPenney learned the hard way. They took a long time to recover.

Here are some marketing tips to help you create promotions that get the maximum impact:

1. Start by creating ads that entice customers with great photography featuring your most highly appealing products. Once customers are seduced by the ad, you can let them know that they can have what they want at prices “too good to pass up.” But never, ever forget that most customers intuitively know that prices that are too good to be true usually are. If you try to scam them, they will ignore you like the plague.
2. When it comes to the length of a promotion, less is usually more. Short sale periods work best because they require prospects to respond immediately to your advertising. Longer sale periods are often put on the back burner until they are lost or forgotten. They elicit no sense of urgency, thus no legitimate, immediate call to action.
3. Make sure your offer is credible. Nothing ticks off customers more than a sale that doesn’t deliver what it promises. Running a sale at up to 70% off, and then having only a few clunkers on sale at the price you advertise may work in getting customers to respond the first time, but they will probably not buy anything. In the end, they will be hesitant to believe your legitimate offers in subsequent ads.
4. Keep branding your product with advertising that is instantly recognizable. A good example of this is the coupons consumers look forward to getting from Bed, Bath & Beyond. They’re regular, recognizable and expected.
5. A basic rule of thumb is that a consumer needs to have to see at least three ads before they begin to pay attention. Choose your media wisely to make sure you get the maximum reach and frequency from each individual program, and from your total annual marketing plan.
6. If your advertising doesn’t jump out and grab your customers’ attention, you are wasting your money. A good way to see how your ads stand out in a clutter of other ads – take a proof of your ad and tape it inside a magazine or newspaper and then flip through the publication to see if it grabs your attention. With direct mail, take the proof and mix it in with your mail, and then see whether or not the piece stands out.