There’s a lot of concern about offering discounts to lure in customers. Discount marketing is the common business practice, and when done well proves to be profitable for a company. And for a successful discount strategy businesses have to set goals for their target audiences and offer deals that actually help grow the business. On the other side, brands with lower profit margins aren’t in favor of giving coupons and vouchers to their customers because they worry that discounts will reduce their revenue while other brands think about creating a coupon-dependant behavior where a consumer only buys when there is a deal.
Discounts can help you:
- Attract new customers
- Move stock
- Reach sales targets when there is a slow sales period.
Planning–––Before you start reducing your sales price– in the hope of drumming up revenue – do detailed analyses to make sure you're still making a profit. It's essential to:
- Compute your current markup, profit margin, and breakeven point
- Set the best discount price
- Prepare a marketing plan to bring inactive customers back and to attract new customers.
- Research your competitor’s current pricing or what percentage discount they are offering.
- Decide how long the offer will be continued.
- Review accounts for any regular times of the month to check if the business has a sales dip.
It’s not time to give up on discounts and vouchers yet. In this article, we have discussed four solid reasons why should businesses offer discounts to their customers.
Discounts Make People Happier
Happy customers are spending customers. One study found that consumers who get a $10 coupon saw 38 percent increase in oxytocin levels and were found 11% more satisfied than those buyers who didn’t get the offer. Additionally, their heart rates, respiration rates, and perspiration levels all decreased; hence, results in lower stress than their peers.
The act of offering a discount makes your audience happier and encourages them to buy more products–––boosting the overall customer experience.
Coupons Create Spending Goals
In-store coupons, gifts or online shipping thresholds encourage customers to buy products to a certain level to receive rewards. However, marketers are often concerned about this discount marketing strategy, believing that it will lower the profit margins of a business. However, if done smartly, it can boost sales by motivating people to spend more.
For example, if a brand offers $10 off on purchase of goods worth $50, then someone planning to spend $40 would push themselves to spend $10 more to reach that threshold. The key to successful threshold discount marketing is to offer the right items to help buyers reach their goals.
In general, retailers use this strategy to get rid of clearance items. They use discounts to encourage buyers to spend more and clear the stock that they would otherwise struggle to persuade customers to spend on those items.
Discounts Convert New Customers
Because of high competition among brands, one of the biggest challenges marketers face these days is attracting new customers. It’s hard to move people from their current buying process, convince them to purchase from you and create an unforgettable shopping experience that brings them back again. If buyers pay less on first purchase (10% off on 1st purchase offer), they would appreciate this welcome behavior and perceive lower risk when making their first order. This also brings customers back again. In short, discount marketing helps customers reducing their risk of trying a new brand.
Bundled Packages Increase Brand’s Loyalty
The “buy one get one” deal is the best discount marketing strategy, where customers' second purchase is free. This prevents customers from visiting your competitors and also builds customer loyalty towards the brand. For example, a spa or could offer a 10% discount on four massages (bulk packages) or more. This will motivate customers to buy four massages deal at once instead of getting one at a time. During this period of the deal, your customers will appreciate your brand and inform others to avail of the package.
*Same it goes with online shopping websites like Daraz that offer the best deals in town. Are you ready to shop products from the best Daraz deals online in Pakistan?
Now, let’s talk about advertising deals and discounts.
How to promote discount marketing?
Discount strategy to boost brand sales is only useful if your target audience knows about it. So marketers must plan the strategies for getting brands deals in front of their customers. The right way to advertise discounts to your locations is through a website, direct mailers, social ads, and on-hold messaging. Furthermore, you must promote discounts in your store for customers who are already there.
If you’re running short of revenue and looking to attract new buyers to invest in your products, learn more about discount marketing techniques that would help you draw customers’ attention to your store.
Thank you for reading! Please share this guide with others, so they never miss an opportunity to boost sales.