Businesses give discounts to create some necessary hype around their products and maximize their sales. Discount marketing creates a win-win scenario. Companies get to sell their products and customers save their hard-earned money. But discounting can sometimes work against the company.
Marketers often offer deep sitewide discounts to drive up sales and this reflects badly on the company’s bottom line. Many of them don’t know how to offer discounts in a way that doesn’t damage their brand and revenue.
Discount strategy in retail is complicated. Coupons, promo codes, or running a limited-time sale, all need to be strategic and segmented to have the benefits the sellers desire.
Huge discounts not only impact your revenue but create a perception that your product is not worth its full price. Fortunately, there are much better alternatives available.
In this article, you will learn how to advertise special offers without big price cuts and coupon codes.
Let’s dig in.
Discounting backfires for a business when it’s the regular customers availing all of the deals. No company wants to make less money from people who are willing to pay full price.
“Segmenting the coupons and discounts is a great way to ensure they have the desired impact,” says Julia Markle of the coupon promotion website ClothingRIC. “So next time you’re running a promotion; do not notify people who are your regular customers.”
Marketers should divide their market into different segments and craft unique offers to attract customers for each of these groups. People that regularly receive your emails but never bother clicking could be enticed with an extremely generous discount.
People who are not on your email list and are visiting your website could be persuaded with a ‘welcome coupon’ on their first orders. These first-time customer discounts could either appear as a pop-up or sent via emails if the customer filled a form where they entered their email address. The offer here doesn’t need to be anything extraordinary and simple free shipping or a 5% discount offer could do the trick.
Giving products away for free isn’t something anyone has in mind when first starting a business. It goes against the entire concept of business. But sometimes, that’s exactly what they should do. Attaching something that’s of lesser value as a gift to a high-end product makes the offer much more compelling to the buyer. If you’re wondering how to offer discounts without reducing price, this is it.
The trick is to find a sweet spot where this lesser-value product compliments the main product. Think of smartphones that come with free wireless headphones. Gifts can bolster a company’s relation with its customers and often create a bigger impact than conventional discount offers. When you give free products to customers, it shows you consider them much more than a source of revenue. People put in a lot of effort to make money and gifts from their favourite shows that you respect this fact.
Admittedly, this isn’t a long-term strategy. Gifts are best reserved for special occasions and that’s exactly how companies should view them. Limited-time offers for customers where they get a free complimentary product can be a cherry on the top of your marketing cake.
Discount ideas for retail, if implemented correctly, get you a temporary sales uptick. But it doesn’t encourage repeat purchases. This is where loyalty programs work better.
There are many ways to reward customers who are your regular shoppers. You can give them loyalty points whenever they spend a certain amount of money on your products. These points could then be used by customers to redeem discounts on their future purchases.
Keep the entire system simple so you know the worth of your loyalty points at all times. Knowing how much discount customers are availing is essential for avoiding deep discounts which can negatively impact your bottom line.
As mentioned before, you don’t necessarily need to give cash discounts. Loyal customers can be rewarded with gifts and free shipping from the company. At the end of the day, this program is designed to retain customers and give them the motive to buy again. One doesn’t always need to market coupons to instil loyalty.
When it comes to customer retention, there aren’t many better strategies than subscription plans. For a business, getting customers to subscribe to your products or services means that they aren’t going anywhere else for a certain time. For customers, it means convenience.
Most customers prefer to stick with a brand if they’re being provided with quality goods or services for a fair price. If said product or service is quick and easy to obtain, it makes the whole thing all the more effective. Subscription plans deliver all of this and more to customers.
While they are mostly associated with streaming services and software providers, subscription plans have a use for a wide variety of products. For instance, $1 Shave Club delivers razors to customers’ doorsteps in return for a monthly fee. The company’s success through the years shows this model is worth replicating.
One has to admit that this isn’t an easy strategy. However, it’s one of the better alternatives to marketing huge discount offers and releasing coupons every month.
Software developers often release lite versions of their applications. These have limited functionalities and are often supported by advertisements. Similarly, many cosmetic companies release mini versions of their products that are much cheaper.
These items are designed for an audience that is not willing to pay full price for your regular products. In many ways, these products are alternatives to promotional discounts. If you were wondering how to offer discounts without sales promotion, this is it. Promote lite or mini versions to customers and there’s every chance they would be impressed enough to buy regular items at a full price later on.
Companies craft different types of attractive offers for customers. But this is a slippery slope because it could condition your customers to wait for the next coupon or deal. And no business wants customers who are never willing to pay the full price. There are a number of examples of customer discounts where the strategy damaged the business in the long run.
But various strategies have the same effect of discounts but are unique and different. You must learn how to promote special offers in a manner that’s beneficial to your company in both the short and long run.
Whether you divide customers into segments based on their buying history, give them a complimentary item with your main product or promote a subscription plan —there are plenty of ways to hype up your products while avoiding the side effects of regular discounting.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.