Mastering Pricing and Promotions with Chase Ballard and Micah Corrigan

Chase Ballard:</cite> <time>0:00</time>

Well, I think that, right there, what you just said is our entire industry. Half of our stores are stuck in 2008. Half of our I’m not even kidding by half, probably, maybe more half are stuck in 2008. They’re still doing Super Tuesday. Sorry if that offended half of you. You should be very offended.

Tina Smith: 0:25

Welcome to the Natural Products Marketer Podcast.

Amanda Ballard: 0:33

I’m Tina and I’m Amanda, and we’re here to make marketing easier for natural products businesses so you can reach more people and change more lives. Hey everyone, welcome back to the Natural Products Marketer Podcast. We are so excited to have Chase Ballard and Micah Corrigan back with us so soon, so thank you guys so much for joining us again.

Micah Corrigan: 0:52

Thanks for having us.

Tina Smith: 0:54

Thanks. Super popular podcast last time we got a lot of feedback for it from it, so very excited to chat with you guys again.

Amanda Ballard: 1:04

Yeah. So if you didn’t listen to part one, I highly encourage you to go back. Even just pause this episode. Go back and listen to part one, come back and listen to part two and it’ll just be a much richer conversation. But there’s going to be lots of great insights for you today as well.

Amanda Ballard: 1:21

So just to hop right in, guys, I know we talked a lot about becoming the influencer in your community Last time. We talked a lot about map policy and how you guys implement that in your pricing strategy and it made me think that I wanted to do a deep dive into pricing and promotional strategies today. Because we run into this with almost every single client when we start working with them, because we’re deep diving into their finances and, you know, looking at how, what their store mixes and all of their inventory and what their margins are, and inevitably it comes up where we find that something’s off with their pricing model and so we’re trying to figure out how to best navigate that conversation with them. So I’m selfishly really excited to just pick your brains today, because I think you have a lot of wisdom to share in this regard. So I want to kind of just paint a little bit of a picture of what we’re seeing as the most common situations that we’ve run into when we’ve been working with stores and maybe you have other things that you would add to it, but what we’re finding the most common is stores are either pricing at full MSRP, with just occasional sales Maybe they have like one or two items or one or two lines on sale at any given time.

Amanda Ballard: 2:45

Option two is they price some lines at MAP, but they’re marketing them as being on sale, and then they’re on sale all the time, and then the vast majority of their products are still at full MSRP, as well as occasional sales line drives, things of that nature, but they’re still only getting close to MAP at that point. And then the third situation we’re running into is stores that are pricing at MAP almost all the time. However, they don’t do extra promotions on top of that. So I’d love to kind of just throw all of that out there and get your thoughts and feedback on what you know pros and cons are of those different strategies, If you would do something completely different and kind of how you think through your pricing strategy. I’ll start with you, Micah.

Micah Corrigan: 3:37

Yeah. So I think that pricing things at full MSRP is just a bad practice as a retailer. When I’ll visit other stores, I’ll see products that are sold at full MSRP, and what it does, in my opinion, is that it just reinforces this idea to customers that shopping in stores is more expensive than Amazon, and so it hurts me as a retailer when other fellow retailers are pricing it at full MSRP. So we’re trying to break that habit of shopping on Amazon. There’s this idea that Amazon is always going to be cheaper, and it’s really not. But if we continue pricing things at full MSRP, then that’s, you know, becoming a reality for customers. So I want to break that habit. And so, you know, we price everything at MAP at our stores and then from there we negotiate discounts and promotions, and then you know, we have other ways to promote further than that. But for us, we’re pricing everything at MSRP when a brand has an MSRP price. For us, we’re pricing everything at MSRP when a brand has an MSRP price, but they’re selling it at MAP.

Micah Corrigan: 4:49

Map is the new MSRP. Msrp really doesn’t mean anything, it’s just a made up number. I’ll give you an example. I was purchasing a dishwasher a little bit ago and I looked online and everything was the same price, and so in our industry we’re really focused on map, but in other industries it’s called a UPP, a universal price point. So if you ever bought a TV or a dishwasher and appliance, a lot of those are the same prices and then from there they have other ways to promote it. Like you get a new, you buy the mattress and then you get the bed frame, you know, for free, or you know the manufacturer gives, you know, an added incentive from there. But yeah, I’m really focused on selling everything at MAP, also known as a UPP.

Amanda Ballard: 5:33

Yeah, chase, what would you add to that?

Chase Ballard: 5:37

Yeah, no, I agree with everything Micah said. I don’t I mean I don’t win any friends with saying this, but like, I think, like honestly, if you’re selling an MSRP, like you need to do a lot of work because I think you’re, you’re pretty much I think you’re you’re out of business. If you’re, you sell MSRP because you’re going either I’m going to move into town or someone like me is going to move into town and put you out of business, or Amazon is just going to slowly kill you and then you also make the industry look bad, like Mike has said, of where now people think always shopping in a store is this bad pricing? So it’s really like get with the program. I mean, the battle of map was won and most brands if you are a halfway decent buyer and you know can talk to brands and buy on promotion and things like that, you can still make 40, 50, 55 percent on a lot of these brands and sell it map every day and that’s that’s a good margin. You know the days of 70 percent margin, 65 percent, that’s not. That doesn’t exist and it may exist for you, but you’re probably not moving volume and you’re probably not making money. And the last we checked. I mean, the thing we say a lot here is we don’t take percent to the bank, you take money to the bank. So it’s how much are you selling? It’s like, yeah, okay, you, you know people need to start looking at how much money they need to operate, not what margin they need to operate. So, yeah, I think just kind of getting back to retail, of buy something and turn it and sell it and have fun doing it.

Chase Ballard: 7:16

The other thing I would say, though, is the thought escaped me, but when it comes to being on sale, so I price at MAP every day on everything I have, and I think everybody should and then we run promotions on top of MAP, and we have to talk to vendors and explain what we’re doing, and usually, when we tell them that we’re pricing it at map every day and we want to do something extra, they’re pretty willing to go along with us. If we don’t communicate that, then yeah, they’re like well, I don’t know if I can do that, but once they find out we’re pricing it at map and we need to compete with Amazon, they’re pretty willing to work with us. And the thing about saying it’s on sale and it’s Matt Price, though, that you know, the whole crux of this industry, I mean the most important thing in this entire industry when it comes to customers is getting your customers to trust you. I’m going to start calling them trust-mers.

Micah Corrigan: 8:22

It’s a new word, Chase.

Chase Ballard:</cite> 8:24

Made it up on the fly. The goal is to get people to trust you with their health, but really it’s just get them to trust you. If you’re sitting here saying it’s on sale, look at this sale 30% off, that’s Amazon’s everyday price. That’s not really a sale. I see what you did there and then the next time. Here’s the problem. When you do actually run a sell and you hopefully start pricing a map every day and you actually do have a cool sell on top of map, maybe they don’t believe you or you know. So trust is a very important thing and you can lose trust very quickly with customers and that should be your most sacred thing as your customer.

Micah Corrigan: 9:08

Did it again. It’s a thing now. It’s a thing now.

Chase Ballard: 9:12

Your customer’s trust, but that should be your most important asset. I think so, yeah.

Micah Corrigan: 9:18

Yeah, and I just want to add to Chase’s point. We call it the Amazon suggested retail price. That’s the map Amazon suggested retail price. That’s the map Amazon suggested retail price. So I mean that should just be the EDLP, that should just be the everyday price. How you market some retailers. They want to take the made up number and take 20% off. I think that’s fine. It just shows value like an everyday value, of course. I think that’s fine. It just shows value like an everyday value, of course, and that’s what we do.

Micah Corrigan: 9:49

But then, on top of that, customers at the end of the day, customers they just have their phone, they have their apps and they’re looking. It takes them one second. It’s not like the 80s or the 90s where you had to drive 20 minutes to the next store and 30 minutes to the next store and then price compare and then call and what happened? In a matter of seconds they can shop 10 retailers online and they should all be seeing the same price point and then from there, however, that e-tailer or that retailer provides extra value. That is going to be the relationship in terms of like, promotions and price. That’s important.

Micah Corrigan: 10:26

So, like for us, we we rely pretty heavily on our rewards program and that’s how we um, you know, give you know, besides running promotions specifically in store, uh, we really rely on our rewards program to add that added value. So, like at our customers, you know, you know, you know they get 1% cash back on everything they buy and then they can use that 1% cash back towards anything on the next purchase and then we’ll do like added extra deals, you know, 10% cash back, 15%, 20, 25, 30. And that really adds up. I mean you’re you sell a product 30. And that really adds up. I mean you’re, you sell a product A lot of times they can accrue, you know, $5 or $10 right in that purchase and then that also helps them come back into the store and then they can use that towards the next purchase and that kind of keeps keeps the money kind of revolving in the same system.

<p><cite>Chase Ballard: 11:20

Yeah, I couldn’t agree more. For any store that has the capability to do a loyalty rewards program. I think that’s the home run of home runs. I guess that would be a grand slam. That is the way to do it, and especially if you can leverage that into your e-commerce, to like yes, yes, yes, yes, because then now you have their e-commerce shopping, they’re not going to want to buy anything on Amazon, even if, you know, because we have that problem, we don’t have a loyalty program and we don’t even have an e-commerce.

Chase Ballard: 12:02

Where I’m at here and you know we’ll talk to people because everybody shops on Amazon. Amazon’s a. Everybody uses Amazon, or most people do, and you know people go, oh, yeah, I just picked up some of those on Amazon. They’re working great, though Thanks for recommending them. Well, without having that loyalty program or that, those you know the, yeah, the rewards, those, um, you know the uh, yeah, the the rewards, um, we can’t. You know. We can kind of say, oh, hey, you know, make sure you can keep supporting us, type stuff. But, um, but really, when you have the reward points or the cash back, you can really, it just makes sense. So, yeah, that’s. That’s, I think, a really successful strategy.

Micah Corrigan: 12:41

Yeah, like when, when a customer is trying to decide, you know what, what’s the difference? Right, they have it, you know, they have it at um town $10 at the retailer. They have it at $10 on Amazon. They have it at $10 on a large other e-tailer. What’s the difference? Well, now I can get it same day at that store. Right now I don’t have to, you know, feel bad that I could save an extra 10% or 20% on Amazon. So that’s a win. You already have that physical location benefit.

Micah Corrigan: 13:07

And then the second benefit, yeah is is I was I was just doing this like a little bit ago too. I was comparing, you know, a product between two e-tailers and, and one of the e-tailers had a better rewards program and fostered loyalty and I’m like, okay, well, if I’m going to invest in this product, you know, and I’m going to keep purchasing that product, well, I mean, that is like a no brainer. You know I can accrue rewards, you know, every time I purchased this. So you know, I, I, I think that is that’s definitely like um people, that you know people should definitely look into that, if they don’t already have a loyalty program, to start investing in one like that.

Chase Ballard: 13:46

Well, and what’s cool is, I’ve never done rewards that high, but that’s what’s cool is a 20% off sale. It just doesn’t ring that well. But you say 20% cash back, it’s like holy. What it’s like excuse me, that just sounds insane. And that’s really what you need to do as a retailer is get your customers to stop, and their jaw should drop and be like are you kidding me Really? So yeah, that has a really good ring to it, and I mean you know at previous retailers that we had a program like that and it was funny. You’d have customers that just wanted to save their money and like they’re like no, no, I’m saving it up, I’m gonna come in here and buy the whole store, I’m gonna save it up. And there’d be like people with like 600 bucks and it was like I mean, okay, keep doing that, that’s fine.

Tina Smith: 14:35

Well, that’s another thing. That’s um, that’s kind of important at the checkout, like training your people at the checkout to have that conversation Like, do you want to use your, your, your rewards right now? You’ve got this much money banked. So I’ve seen some retailers do that very well and I’ve seen I’ve been in other retailers where it prints it out on the receipt but there was no conversation that happened. No one reminded me that I just earned more rewards. No one was thanking me for shopping. That’s a whole point point of the experience where you can make your customers more. You can make them into trustmers.

Micah Corrigan: 15:13

You know what I’m saying? Yeah, customers, I love it.

Micah Corrigan: 15:17

We’re going to turn that into a natural progression, like we had. You know, we had one customer who like swore up and down, he’s never joining a rewards program, he doesn’t want to do it, and um, it took about two years or three years, um, for customers in front of him in line at oh, $10 off, $15 off, $20 off, $5 off, and it wore him down so much he’s like, okay, fine, I’ll do it. He was so tired of seeing everyone save so much money in front of him. You know, and there’s ethics like we don’t, we don’t sell our customer data. Obviously, you know we want to keep that within, you know our ecosystem, but it just kind of keeps the dollars flowing inside our business, which has been very helpful.

Tina Smith: 16:01

Yeah, key key for trust is to have a conversation about how you’re using people’s data, and some people aren’t asking immediately, but it’s nice, when they go to look at the loyalty program, that they can say, oh wait, they’re not selling this to anyone.

Amanda Ballard: 16:20

I want to ask, you know stores listening to this and maybe they fall in that MSRP camp and that’s, that’s their comfort zone. The thought of reducing their prices you know 20 percent to be a map every day scares the crap out of them. What advice would you give to a store like that that you know? Here’s what you’re saying. Like, you guys are two really successful retailers doing this every single day and they, you know, maybe only do map pricing a few times a year per line. What, what? What does that transition look like? How do you do that in a way that isn’t so terrifying?

Micah Corrigan: 17:02

Well, first, first of all, I want to add that it’s slowly going to erode the trust. Well, first, first of all, I want to add that, um, it’s slowly going to erode the trust. Like, you know, you’re selling to that customer but that customer has a son or a daughter and that son or daughter is online and over time, that child is going to say hey mommy, hey daddy, you can save $10, $20. How many times are you buying this supplement? You know, 12 times a year. I mean you could save a hundred dollars right there, $120, right there, and then you multiply that by. You know, you know two protocols, three other protocols for the protocols. You know six. You know brands. I mean, it’s just a ton of savings. And slowly, people are starting to calculate that I’m like, why am I spending this much money? It’s the same product and there’s like that’s another conversation if it’s actually the same product. But you know, let’s just say, for the sake of this, that it is the same product. Then that’s going to slowly, you know, create a bad taste in that person’s mouth because they’re going to be thinking, oh, like, what else are they doing to me? You know, how else do I? Am I getting like cheated. So I think that trust is going to slowly erode.

Micah Corrigan: 18:11

But I, you know I would just start slow. You know you could just do I would. Well, okay, I would first find your partner brands. So there’s going to be some brands that, like you, can’t do it and you have to decide if it’s worth it to carry those brands. And there’s going to be many brands like Chase brought up that if you talk to them and you say, hey, I want to price it at a competitive price every day, most partner brands are going to be willing to play some kind of ball with you.

Micah Corrigan: 18:40

I think the brands are just tired of people padding their margins with 60%%, you know, and it’s not good for the whole industry like that. But I would start slow. I’d find the brands that can do it. I’d find the brands that you know that are partner brands and I would slowly start making those a priority and ordering up on those, giving those more shelf space, promoting those, those more shelf space, promoting those. You know you don’t need to have. You know 70 varieties of vitamin C, you know you can slowly start whittling that down to priority or to partner brands and then making sure those partner brands can give you the margins at the map price.

Tina Smith: 19:17

So let’s talk about that for a minute. Micah and Chase, we can come back to you if you wanted to chime in on that. But I hear a lot of times like focus. So you’re talking about partner brands. Focus is helpful, even in the amount of choice that you’re giving the customer. But what is the right amount? Because we hear things like okay, well, some people aren’t going to try a protein powder unless it’s, you know, a certain dollar amount or less. So what are those price points? Are we looking for something in high, medium, low range? Are we looking for 14 kind of skews Like what? What does that look like?

Micah Corrigan: 19:59

Sure, yeah, um, I think the high, medium, low is a good strategy. Um, I You’re already a physical retailer. I would lean more into the higher end. That’s just my personal opinion, or at least that works with our market. People can buy the crappiest products that they want online already. You’re there to solve the needs of the customer. Make sure you’re providing high-end quality service, high-end quality products. I would go with the higher end. Insert maybe some middle brands that are there for price-sensitive customers, of course, but I would lean already into the higher end because our industry, most of our retailers, are very niche.

Micah Corrigan: 20:44

Right, we’re not in the mass market. The mass market does a great job at selling mass market products and mass market products are really great at low potencies, fewer servings, lesser quality ingredients. They’re they’re focused on getting that price point and I think if you compete directly in that lane, it’s not, it’s not a winning strategy In my opinion. Um, I think the lane is going to be more in the unique boutique therapeutic lane. It’s not, it’s not a winning strategy in my opinion. Um, I think the lane is going to be more in the unique boutique therapeutic lane.

Tina Smith: 21:15

Yeah, chase, I felt like you were about to say something when he was talking about your partner brands.

Chase Ballard: 21:21

Oh, I don’t remember what I was going to say. Um, I did have a. It’s funny. I had a funny story that came up the other day of talking about these brands and negotiating with them, with partner brands, and it was um, I was asking for a deeper discount to do something crazy. I forget what it was, but, um, it was funny.

Chase Ballard: 21:41

It cracked me up because they said, oh, I think it went, got up to their regional or their us sales or the, the, the bigger dog. They’re like, oh, it’s chase. Well, yeah, we know he’s going to pass on the price, just do it, because there’s so many stores that don’t pass on the price and we’re tired of dealing with them. And it was just like oh well, thank you, other retailers for helping me get a better deal. So, um, but yeah, that was just a funny story that there, apparently, there’s a lot of retailers that aren’t passing on these deals and it’s just. I mean, that’s where, again, when we talk about negotiating with these partner brands, most of them are just desperate for someone to actually execute a promotion and pass it on, like that’s really all they’re wanting. It sounds like like it’s like they’re not asking for a ton, it’s like you’re just going to follow through on the deal. That’s great, so I didn’t really have much to add other than that, though.

Tina Smith: 22:37

That’s a perfect segue into promotions. Tell us a little bit more like what’s your strategy around that. When do you start doing them? How do you make the choice of who, how often? That kind of thing thing.

Chase Ballard: 22:50

Yeah, I mean, you know typically brands. You know a typical brand is you get an everyday price or you should negotiate for an everyday price where you can make money at map. You know, for example, depending on the brand, you should be making anywhere between 35% margin up to 50% margin at map, depending on. You know volume, relationship and um types of products. But you know. But really then from there, you know most brands are going to run a line drive on top of their everyday discount a few times a year. Or you know you can negotiate certain things. But you know, just execute your promotions around that.

Chase Ballard: 23:29

And you know I’m notorious. I don’t know if I’m notorious. I’d say other people do it too. But I don’t like falling into promotional calendars. It’s like I kind of use those as a guideline and then I just kind of say like okay, well, don’t hold me accountable to any of that. But you know, let let’s work together and let’s do my custom. You know, this month I want to do this, this month I want to do this, this month I want to do this, and it works out pretty well. And I don’t know you. Just, I don’t know. For promotions I don’t.

Chase Ballard: 23:56

I don’t let brands really dictate what they want to do for promotions. I kind of say here’s what I want to do, because this is what excites me. It kind of goes back to what I was saying last podcast of like you need to be the owner, like don’t. If it doesn’t excite, you, don’t do it. Like you know, thank, thank goodness, so many of these brands are going away from. They used to do this a lot and I think most of them are stopping finally, I think, but this whole like oh well, this month we’re having our B vitamins on sale and on next month it’s our vitamin D, and then then, oh, next month it’s like just stop, like just do everything or don’t do anything. And I think we’re finally kind of getting back to it’s just a pure line drive instead of like categories and subcategories and stuff like that. But I don’t even know why I got on that point. But yeah, just make sure, dictate to what the brand, dictate to the brands what you are excited about, what you want to do, and execute that.

Chase Ballard: 24:51

And I give a lot of the brands ideas of like you know, I tell them like listen, come up with the ideas. Here’s the margin I need to hit. But as long as I hit this margin. Sometimes on a promotion, we’re doing a margin of like 20% 25% net margin. But you know what? 20% 25% net margin. But you know what, if we didn’t do that promotion and we sold it at 40% margin, maybe we bring in $500 in sales on that item or that brand that month. I mean $500 in margin that month. Doing that promotion, we may bring in $3,000. Stop thinking about percent of margin and think about dollars. What’s exciting, what are people going to be excited about? And just about dollars, like what’s exciting.

Amanda Ballard: 25:35

What are people going to be excited about? And just do that? I don’t know. Well, and I think that that’s an interesting point, because I know we’ve talked about this on previous episodes as it relates to co-op, and I think the the concept is the same If you are going to a brand and you’re like, hey, I have this idea around this marketing activity or this promotion, or both together, what do we need to do to make that happen? Like they’re going to be super excited to work with you.

Amanda Ballard: 25:57

If you’re just like, okay, what can I get from you? They’re not going to be as excited to work with you. But if you are taking the initiative and coming up with these ideas and thinking outside of the box, they’re going to be way more likely to say yes to even the craziest of ideas. And they’re going to share that with other customers too, because you know that’s again, the beauty of this industry is hey, chase is doing this thing down in Florida. Would you want to try that in your store, micah? Like that’s, you know that worked really, really well, so it can inspire other retailers to get ideas and then kind of just set off this domino effect of success for everybody.

Chase Ballard: 26:42

Well, we started doing a thing about two or three years ago. It was this crazy idea. It started with Ancient Nutrition, I believe. It was buy one, get one free at Matt Price and we were like wait, can this actually work? And you know, we put pen to paper and it kind of worked out and we started doing that. They actually took that nationwide to a bunch of select retailers and copied that program. So, yeah, they took this program to other retailers and they started launching it there. They actually got their product higher up in spins. They called me and thanked me about that.

Chase Ballard: 27:21

But anyways, what we started doing from there is we tried it with some other brands and we’re like, okay, hey, this is kind of working, here’s how we’re doing it, here’s kind of the magic strings we’re pulling. And then we started doing it with some other brands and we’re like, okay, hey, this is kind of working, here’s how we’re doing it, here’s kind of the magic strings we’re pulling. And then we started doing it with two, two or three other brands. And now we’ve got it kind of so streamlined to where, when I meet with a brand, I’d say basically, here’s our package tiers, to where, if you know, we sell it map every day. So I have to have this margin, or you’re not coming in the store.

Chase Ballard: 27:48

And then the second one is like all right, and then we do buy one, get one half off, you know, at map, and we need this margin to do that. Your lift’s going to be about three to five X. They’re like okay, that’s cool. And then it’s like all right, and then we have our BOGO free. Now that’s where they’re like holy crap, what? Like 50x? Well, you know maybe, but 20x is usually pretty much guaranteed.

Chase Ballard: 28:16

And so they now want to work hard to get to that. So I kind of give them the parameters and say here’s the game we’re playing, here’s the tools you need to play in this game. And then they work hard to come up with ideas to do that. So you kind of put them to work and say here, here’s the, here’s the parameters, like, have fun. And that’s worked really well. And so now we’re on year two or three of that and, um, I used to have to work and scrap and claw for every like to get those bogo frees going. Now they just kind of fall in my lap because the brands understand where I need to be and kind of understand the rules.

Tina Smith: 28:53

So okay, you said a lot of numbers there and I just want to talk about them again, because they’re big. Like you’re talking about big numbers, and the thing I was thinking about when you were talking about promotions and doing like really big deals is you’re trying to buy new buyers, like you’re trying to move people into the category who haven’t tried it before yes, people that are there enjoying some benefit of it too, but you’re not necessarily doing that for them. So you’re trying to buy new people. So my question is if you get to that 20 X with a BOGO, how long does that last? Does it stay at 20 X, or is it? You know you’re here it lifts to 20 and then it drops back down, but not lower. What does that look like?

Chase Ballard: 29:40

Yeah, no, it’s definitely. Um, there’s, there’s repercussions to that and you know, some of our customers have gotten wise to, you know, to just brand switching and brand hopping to where, say, we have green fibrants BOGO free, and then we have ancient nutrition greens BOGO free, and then maybe another greens, bogo free. They’ll just kind of migrate to whichever greens is BOGO free. So there are dangers in some of that. Honestly, I don’t even think most retailers need to do the BOGO free type stuff because I think it’s a little too aggressive for most retailers. Because I’m not, you know, a back If people haven’t listened to the personal I might.

Chase Ballard: 30:18

My company we don’t have. We’re not a health food store, we are a grocery store with some health products, but we have a wellness set like we almost have like a mini health food store wellness set in our stores and so we don’t really have our own separate social channel. We don’t have our own separate media team and marketing access Like. So we really are blessed with having a lot of people Like we have about 3000 to 5,000 feet through our store today, so we kind of have to grab them with hey, look at this crazy deal. Like that’s kind of our best way to to kind of have to grab them with hey, look at this crazy deal. Like that’s kind of our best way to to kind of get sales is to have these mind blowing deals.

Chase Ballard: 30:57

If you’re already having a good customer base and people are coming to you for wanting those therapeutic things and wanting to hear you, I still think you should run good promotions. I don’t know if you have to do something as crazy as a BOGA free or I think you should still play with it every once in a while. But I forgot exactly what you’re asking. But there are dangers and you do see, you still see a lift because you’re buying customers and that’s where the brands are excited about that. I mean, yeah, you, you, you see a lift, but it’s not 20 X in perpetuity. No, it goes back down. I don’t have an exact on where it goes back down to, but, um, it definitely does help buy that customer for sure.

Tina Smith: 31:35

Yeah, I mean it’s. It’s probably building your base. It’s not 20 X, but it’s building on top of what you had before and then the next time you climb it’s a little bit bigger. So you were talking about marketing with that. So that’s interesting. You’re probably in store signage, that kind of thing because you’re saying you don’t have access to like do particular promos on social media or through email with where you are right now.

Tina Smith: 32:01

But I was just thinking about there is that chance and I’m glad you talked about the brand switching a little bit of cannibalism of your own people moving from one thing to another. And I would caution people to be very careful, especially if it’s one of the medium tier brands that you’re talking about. Micah, when you start running promos on that, I like to segment out people who are on those premium brands already. So if they’ve been buying premium brand X for a protein powder, I’m not going to send them the email promo around the mid tier or lower tier brand promo that’s running, because I don’t want them to switch. So we’re careful with that. But I was going to ask if there’s any other marketing that you guys do chase.

Chase Ballard: 32:48

It sounds like maybe not, but you’re just trying to catch eyeballs as they’re walking by yeah, no, and before I segue into that, I will say we are very selective on the types of products we will do bogo free on, because just any product isn’t doesn’t really work. I mean, I’ve turned down brands now and and you know, I may still do it, but it just I tell them it’s not gonna be as successful, but typically those are very successful on your brands that you can switch to and have the same effect, like greens, proteins, collagens, stuff, to where it’s maybe a flavor preference or yeah, there’s a little bit of uniqueness. But okay, well, this one’s 10 types and this one’s three and this one’s five, and it’s like okay, but it’s still pretty much the same. When you get into your like Terry, naturally, well, I take the, I take Terry, or I take you know, life seasons, or I take like having people jump from product to product. Like that People aren’t as willing to do that they want. They know that specific formula works for them and we I think as retailers in this space you don’t want to be really be incentivizing that product flop on those type things. Like again, our whole goal is really should be getting people to trust us with their health and helping repair their health. Now, obviously we have to. You know we’re retailers also, so we have to make money and sell and do stuff in between those things. But the root of it all is getting people on kind of a protocol that works for them. So that’s where things that do succeed really well in promotions that are bigger are those more.

Chase Ballard: 34:18

I call them kind of pantry staples my southern accent flew in there but some pantry staples. But some pantry staples like your greens, your proteins, your collagen, mct oil, things like that. They’re like OK, these are staples and you can kind of trade brands pretty easily for the most part. Sorry for my brands that don’t think you can trade brands easily in that, forgive me. As far as other marketing things we do, we do a lot of in-store signage. Yeah, that’s the biggest thing we do. We lean a lot into like promoting local, promoting top sellers, uh, staff favorites, things like that, and things you can do on the shelf like, just because you don’t have a great marketing um, team, um or or social media or website, I think you should get one of those and get that going if you have access to it. Um, but do a lot of things in-store with proper signage as well.

Tina Smith: 35:13

As long as you have the traffic, I think for sure yeah.

Micah Corrigan: 35:16

And then one of the things we also include is we use Save Naturally, so that’s going to have the little sticker. You put it on the shelf and then that purchase is subsidized directly from the product manufacturer, from the brand itself, and then that retailer gets reimbursed automatically every two weeks. So that’s been working really well for us. It’s a very safe. Great Naturally runs on it as well. So Great Naturally knows that we can subsidize that product directly on the shelf every day for that campaign and we know that that retailer is going to get reimbursed instead of all the other ways that our industry is currently doing right now with paper coupons. But that’s a great way that we partner.

Micah Corrigan: 35:57

And then also we rely heavily on the infra flyers. So that’s what we do. We add on top of that we add the rewards program and then we’ll do in-store maybe seasonal things, like other special things where it’s definitely like a map violation. So we don’t do that online, Uh, but that’s more of an in-store specific promotion like a, you know, like a BOGO or you know like a, really, you know. You know, buy one, get one 50% off. We don’t do that online just because that’s going to violate, you know, our partner brands, maps, but you know there’s, there’s tons of those types of things that we do. And then with um, you know shelf talkers, and then with signage, yeah, it’s a, yeah, it’s really important.

Amanda Ballard: 36:41

So, micah, I’d love to just elaborate that on that a little bit further, because it sounds like your, your store. Obviously you have have your unique boutique, therapeutic kind of mantra that you live by. I think there are other stores that probably are very similar to you and that they’re like we’re super consult. We have a very consultative approach. We carry these high end lines that maybe they don’t offer these great discounts. So like, why should we discount? So how can you? Is there a fine line between having these more premium brands and discounting? Does it cheapen the brand or does it just make the customer happy?

Micah Corrigan: 37:26

Again it goes back to the erosion of trust. I don’t want to oversell a price or product for a customer. I just don’t want to do that. I think that Otis is on the brand too, from the last podcast. Just make sure you’re selling products that don’t make you look bad. Just make sure that you’re not selling brands that are doing 50% off, 60% off, mat violations behind your back. Dtc Don’t allow that. And then, having accepted that, then you know work with your brands, with you know like the premium brands, when you’re.

Micah Corrigan: 38:07

I guess what your point is is like with the margins, right, just make sure that that margin is healthy enough for you to afford high quality service and high quality staff that can help your customers. That’s the main thing. It’s very difficult to have high quality service and staff and sell everything at a very cheap mass market product and a mass market margin. That doesn’t really work. So I think, finding those premium quality products that you can make a healthy margin at the map every single day, and then quality products that you can make a healthy margin at the map every single day, and then from there you can negotiate promotions. I would look at it that way and we ended the last podcast with, like, there’s four like games that we have in this industry. Right, there’s the EDLP game, which and I think this is kind of how Chase is also looking at the different tiers right, you have the EDLP game, you have the line drive game, you have the volume game and then you have the random discount games or the seasonal, and those are my least favorite.

Micah Corrigan: 39:07

I was talking with a brand about that and I was like when is your Ashwagandha going to be on sale next? And they had no idea. They said maybe Q4, could be Q3. We’re not sure yet. And so as a retailer, I’m trying to allocate my funds for the entire year. I’m trying to figure that out. I have a budget. I don’t know when I’m going to buy it next. So those types of brands where I can’t figure out my margins, it’s always like a guess. We really steer away from those brands. And then the EDLP is the golden goose.

Micah Corrigan: 39:38

Many brands, they can’t afford to do an EDLP 50 margin. Maybe they do 45, maybe 40, maybe 35. There’s different types, maybe 30. There’s different types of tiers like that. And then there’s two other ones the volume and then the line drive. I personally Everyone does line drives drives. People are very used to line drives.

Micah Corrigan: 39:59

I personally don’t like line drives that much for me, just because when I sell a product like, the whole point is to grow a brand. Right, we want to grow a brand, we want to gain that trust, we want to, like, buy new customers, like tina said, and then I sell out and then I don’t know how to order again. Now I have to reorder and it’s 20% margin. What do I do? So I prefer volume, because volume, I can go to bed at night knowing that the next day I can always order at that discount. I just have to do a little bit of volume and then from there you have to figure out is the volume gross? Is it 72? Is it 144? Is it 60, 36? Is it 2000 units? Is it a pallet? What is that? That’s going to be a negotiation that the retailer has to do again with the brand.

Micah Corrigan: 40:54

But reorders are dependent on item movement when the brand sets it up as a volume.

Micah Corrigan: 40:56

If the brand sets up their entire promotion as a line drive, then reorders are dependent on a random gregorian calendar month, which is typically expo west.

Micah Corrigan: 41:02

You have expo east, which is no longer expo east, you know what I mean, and then you have, you know, the two other shows, um, three other shows like throughout the year, and then a lot of people are kind of leapfrogging to that next promotion.

Micah Corrigan: 41:15

Um, so just make sure like that’s just a lot of different types of promotions that you can work directly with the brand. But the whole point is to make sure, like Chase was saying, make sure that there’s at least a healthy margin on an EDLP or not EDLP volume, just everyday way that you can buy that product. Make sure that that’s a healthy margin and then from there do those like discounts that like Chase was talking about. You know, buy one, get one. You know, map off and that will help grow the brand and brands really want to partner with stores that follow through with that. And then you sell it out and then you can buy it again. You don’t have to wait till Expo West to buy it again, you can buy it again tomorrow. That’s what brands really want and I think that’s kind of the method that we as retailers need to follow as well.

Amanda Ballard: 42:06

So we’re running close to the end of our time, but I wanted to make sure I asked this question. So a lot of retailers are kind of married to their pricing and their promotional calendars, structures, all of that. One of the objections that we hear is you know, maybe we could switch to map on some brands, but like our customers have always been used to this, like this is how we’ve always done our discounts. You know, an everyday low price sounds great, but they, you know they’re used to seeing our signage look a certain way or our discounts look a certain way. How would you encourage retailers to take ownership of those changes, given that they should be a positive for their customers? How do they communicate that in an effective way?

Micah Corrigan: 42:54

Well, first I want to say, like the feet, like timmy and timmy is a fictional character, right that has a smartphone and that will slowly start showing his or her parents. You know timmy, his parents, right, like that. You know the. You know they can buy these supplements cheaper somewhere else. So I think it’s like a band-aid. I mean it’s like it’s it’s a tough, you know, bandaid to like rip off right away, but I think, over time it’s like an investment. It’s taking, you know, two steps backward to take three steps forward.

Micah Corrigan: 43:28

I think if you want to remain relevant and if you want to, you know, stand top of mind. I think it’s like a transition that you slowly have to move forward with and customers, over time, will get used to it. We used to organize our store by a brand and because for us it was better, because for us it was like easier to order that way, but it was terrible for the customer. You know vitamin D was in, you know. You know seven different aisles, so so it’s, it’s so it’s what’s better for the customer at the end of the day. That’s how I would look at it.

Chase Ballard: 44:02

I was sidetracked there but I was looking up the exact verbiage on a quote. There’s a number of quotes out there, but I’m just blunt with other retailers and they may like it or not, but honestly, one of the quotes that I like is Benjamin Franklin. It says when you’re finished changing, you’re finished. So if you’re married to your programs, like my BOGO free program that I have right now, I hope I’m not running that in six years. That’s not good on me. Like I need to be changing stuff. Like if you’re stopped changing then you’re dead. So yeah, and on that note.

Tina Smith: 44:48

That’s pretty much die, yeah, uh, I think I mean there’s a lot of truth in that we’re messing around, but there’s a lot of truth in that because change is inevitable. So you’re in. One of the things that I talk about is that law of entropy, like if you stand still, you’re actually going backwards, because there’s constant expansion and change.

Chase Ballard: 45:04

Well, I think that, right there, what you just said is our entire industry. Half of our stores are stuck in 2008. Half of our I’m not even kidding by half, it probably may be more Half are stuck in 2008. Half of ours I’m not even kidding by half, it probably may be more. Half are stuck in 2008. They’re still doing super Tuesday. Sorry, if that offended half of you, you should be very offended. Um change get better pricing.

Tina Smith: 45:31

Well, I mean, that’s really part of our mission here, though, is to help people. It is part of it is they. They’re not out and about and in touch with, maybe, whatever else is happening in the retail world, number one and number two in this industry. So part of the reason that, um, we’re bringing you guys to the table again and again is because maybe this might be the last time now.

Amanda Ballard: 45:56

When the complete flight is funneling in.

Chase Ballard: 45:59

I think people need to wake up and like I’ll help any retailer, I’ll give my phone out to any retailer. But like we’ve got to change, you’ve got to grow with the times and you know it’s we’ve had. We’ve had 16 years now, or when the smart I mean what social media came out 2000,. I don’t know it’s. We’ve had a lot of time. I love this industry more than anything. I want to keep it healthy and surviving and there’s a lot of stores struggling and dying when this is the time when natural product health is the highest it’s ever been and it’s only growing and getting higher. But people are turning to TikTok and Amazon and not the neighborhood health food store that’s been there for 30 years and that’s a problem.

Amanda Ballard: 46:40

Yeah, so let’s fix it and change together. So awesome. Well, thank you guys so much for your time Always a pleasure and we’ll see you guys next time. Thanks so much for listening to the Natural Products Marketer podcast. We hope you found this episode to be super helpful. Make sure you check out the show notes for any of those valuable resources that we mentioned on today’s episode.

Tina Smith: 47:02

And, before you go, we would love for you to give us a review. Follow, like and subscribe on Apple Podcasts, Spotify, YouTube or wherever you’re listening today, and make sure you join us for our next episode, where we give you more marketing tips so that you can reach more people and change more lives.