Everyone loves a deal. Price reductions, coupons, closeouts, holiday sales, loyalty rewards, BOGOs, rebates, scratch-and-dent pricing, and interest-free purchasing attract buyers. You might think these are temporary sales boosters, but there’s more to a discount strategy than meets the eye.
A well-placed discount or two is a long-game opportunity worth taking. You and your customers can reap the rewards. Here are five reasons why you may want to offer one.
1. You Build Relationships, Not Just Buyers
When you offer a discount to your customers, you tell them they’re valued. You appreciate their business. Moreover, you will appreciate their loyalty to your brand.
Those who feel valued will come back again and again, so long as you reward them for their fidelity. Discounts offered via rewards programs will do the trick. And rewards programs build relationships rather than merely attracting one-time purchasers.
You can learn something from companies that don’t appear to struggle with getting customers through their doors. Think about major theme parks, sporting venues, car rental companies, and big-box stores. Many of them team up with employers of all sizes in an employee corporate discount program.
Such programs build relationships all around. Employees feel loyal to employers. Corporate discount program partners build ties with companies and with their employees. Commit to discounts and you’ll discover committed relationships.
2. You’ll Gain a Competitive Edge
Especially these days, the cost of products is a strong consideration among consumers. With so much competition for every dollar they earn, you need to find a way to get the edge on your competition. Discounts can be how to gain it.
You can offer a percentage off, a dollar amount off, a BOGO deal, free shipping and returns, or loyalty discounts. In every case, you’re improving your price point. And that can improve your chances in a cutthroat market.
Of course, some customers can and are willing to pay a premium for products. But for most of them, with everything else being equal, the amount they’ll pay is the clincher. Less is, indeed, more when it comes to their budgets.
Today’s shoppers do their research, and they consider multiple factors before making a purchase. But price holds prominence among them. A discount can give your brand the advantage.
3. You Can Clean House
Businesses that carry inventory are always caught in a juggling act. Too much hurts your bottom line. Too little and you face the wrath of customers waiting for merchandise on backorder.
Offering discounts can help you hit that sweet spot in between. You clear space for new inventory while customers get a great deal. That’s a win-win proposition when the cost of keeping something on the shelf becomes too expensive.
Remember, inventory ties up cash you could be using to grow your brand. Sure, you won’t be making as large a profit on items when you sell them at a discount. But you will be freeing up dollars to reinvest in the business.
If you want to clear too much, outdated, or lackluster inventory, do a deep discount on the lot. You’ll find customers willing to help you take it off the balance sheet. And it’s far better to clean house than get taken to the cleaners.
4. Give Sales Volumes a Boost at Critical Times
Strong sales are a key performance indicator for any business at any time. However, there are some periods when peak volumes are particularly necessary. Discounts can help you get the boost you need.
Perhaps you want to expand your product line or enter new markets. You’ll likely need a loan or increased line of credit to make it happen. Showing strong sales and healthy growth will undoubtedly be a requirement of loan and credit approval.
If your company has shareholders, you may live or die by quarterly sales volume performance. If you’re considering a merger or acquisition, your company will need to look healthy on paper at certain times. And if an industry sales report is due, you’ll want your brand to rise to the top.
Discounts can boost sales volumes at any point in time. However, some points may be more critical than others. Because timing may be everything, put a time limit on your discount to create the necessary sense of urgency among customers.
5. You Can Build Brand Awareness
Nothing says, “Hey, look at us” like a great offer. That’s especially accurate when you’re a little fish in the large pond, struggling for attention. A lucrative discount could lure new customers to your brand.
Making prospects aware of a discount may prompt them to examine your brand, read reviews, and make that first purchase. If you’re competing with a better recognized company, a lower price may be all consumers need to try you on. And don’t forget to reward that behavior with additional discounts in the future.
Leverage the impact of your discount by spreading the wealth. Refer-a-friend offers and family discounts not only appeal to buyers, but they also entice them to shoulder some marketing responsibilities. Digital coupons customers can share with others often put you in front of new prospects.
Don’t keep a great discount to yourself. Leverage social media channels, your website, and content placement in third-party media. The more you spread the word, the more consumers you can get to notice your brand.
Don’t Discount the Impact
Getting something more for less is a welcome event for virtually every consumer. While you may think that discounting a product is just a good way to get rid of it, you can do so much more. Discount the product. Don’t discount the impact of doing so.
