How to Successfully Offer Discounts in Your Business
When was the last time you went on a shopping spree? The answer is probably discount season because who doesn’t love a good deal to save money? It was concluded in a survey that people end up buying things they don’t even need because of a good discount offer. Businesses sell up to 73% more if they offer a discount package.
Are you shocked by those stats and how much sales brands and businesses are generating only because of discount offers? Don’t worry, you can do it even more effectively than your competitors because we got you covered with our guide ‘What are the 5 promotional strategies?’, found later in this blog post.
Before jumping in, let’s have a look at how offering discounts can help you.
The benefits of offering discounts
If you don’t know much about marketing tactics then you might probably be wondering why brands offer discounts when they can sell the same product or service for the original price and make more profit. Well, here is why they offer discounts from time to time:
- Increased sales: Offering a discount can be a great way to attract new customers and encourage existing ones to make a purchase. When people see that they can save money, they may be more likely to buy from you.
- Improved customer loyalty: Offering discounts to loyal customers can be a great way to show them that you value their business. This can help to build long-term customer relationships and encourage repeat purchases.
- Clear out excess inventory: If you have products that aren't selling as well as you'd like, offering a discount can be a good way to move them off the shelves. This can free up space for new inventory and help you avoid tying up money in slow-moving products.
- Increased brand awareness: Offering discounts can be a great way to get your business in front of new customers. If you promote your discounts effectively, you can attract people who may not have heard of your business before.
- Increased cash flow: Offering discounts can help you generate sales and bring in cash more quickly. This can be especially helpful if you're in a slow period or if you need to meet certain financial goals.
Things to consider before offering discounts
Offering discounts and special packages are a great way to meet your financial goals for a while but it may not always be the best idea in the long run. Here are some things you must take into consideration before you plan a discount offer:
- You'll need to consider factors such as your profit margins, how much you can afford to discount your products or services, and whether you have the cash flow to handle a temporary reduction in revenue.
- If you offer high-quality, unique, or in-demand products, you may be able to offer smaller discounts without impacting their perceived value. On the other hand, if your products or services are more commercial, you may need to offer larger discounts to attract customers.
- If you're targeting price-sensitive customers, they may be more likely to respond to a discount. However, if you're targeting luxury customers, a discount may actually decrease the perceived value of your products or services.
What Are The 5 Promotional Strategies?
Most businesses that copy their competitions’ discount strategies end up failing their own campaigns.
Why? Because they don’t understand the different types of discount strategies and how they help. Don’t be one of them! Go through these strategies to learn everything you must know.
Time of year offer
People wait a whole year for Black Friday and Christmas sales because for years brands have been giving promotions and discounts at those times of the year, so people now expect them, every year. If you do not have a discount strategy for the peak times of the year, then your target audience is definitely switching to your competitors because no one wants to spend extra.
Some of the leading times to offer a promotion are:
- Black Friday
- New year
- Cyber Monday
Limited time offer
Giving your audience more time to make a buying decision usually ends up in abandoned carts. People tend to buy a lot more than usual if there’s FOMO (Fear Of Missing Out.) If you offer a promotion or a discount for a limited time such as ‘sale ending at midnight’ or ‘the product is limited in stock’ you are playing with people’s psychology that they will be left out if they don’t hurry. This creates fear in them and people end up buying without thinking.
Creating awareness when launching a new product can be pretty daunting because people have difficulty trusting a new thing without any testimonials or reviews. Giving pre-sale discounts can help you make some sales and build trust with your audience also. A pre-sale can help you win some cash upfront that you can also use in inventory and procedures.
Have a stock you don’t know what to do with? Offer stock clearance sales so you can meet your sales and financial goals while clearing up the old stock space for new inventory. When a clearance sale is promoted on digital platforms, it can help boost visibility, reach a wider audience and create a buzz around the brand.
Getting additional benefits with year round sales can transform your customers or audience into loyal consumers. A loyalty program is a marketing technique used by popular brands and businesses to encourage people to buy more in order to receive points that can be used for extra discounts. This can also be a great way to gather emails from your customers for promotional purposes as 72% of revenue is generated from email marketing.
Discounts may be a powerful tool for boosting customer loyalty and sales, but it's critical to use them efficiently. You can develop a successful discount plan that aids in the accomplishment of your business objectives by taking into account the financial state of your company, the worth of your products, and your target audience.
Setting up a discount offer plan can be somewhat of a difficult task, especially if you aren’t into marketing and psychology tactics. No worries, we’re here to help! Fill out the form and we’ll point you in the right direction.