Best Practices for Avoiding Discount Disasters
Discounts can be a dangerous game, but they don’t have to be. Yes, discounts can and will increase the amount of sales that you have, and while that may seem like a good thing. Too many discounts applied inappropriately will hurt your bottom line. I cannot emphasize enough how your pricing strategy needs to be integrated with your marketing strategy. Segmenting discounts, much like your marketing efforts, will yield higher leads. This is the same for applying different offers to prospects in different parts of the buyer's journey. For the best discounting and pricing methods, you will see many parallels to what you already know about inbound marketing.
Discounts will vary across different types of businesses and business models. What works well for one company may be disastrous for another company. The best way to avoid implementing the wrong discounting strategy is by being secure in your business model and marketing strategy. These will guide your discounting strategy decisions. Your business SMART goals will drive you towards what you want to achieve with discounting. When you make decisions in regards to discounting, you will need to keep your business goals at the forefront.
Different Discount Offers for Different Buyers
All buyers are not the same, at different points in their journey certain discounts should and will catch their eye. Those in the early phase of the buyer's journey, known as the awareness stage, will be looking for discounts that apply to their situation. New member discounts should be applied here. Additionally, there should be a clear and obvious reason behind the discount. The new member discount is given because of the customer's status as a new customer. Some in the consideration phase of the buyer's journey will need a different discount and a different reasoning behind the discount. Perhaps if they are a returning customer a rewards or loyalty system would be appropriate and would provide reasoning behind the discount.
Finally, there are certain discounts that should only be deployed to those in the final stage of the buyer's journey. These discounts will be the one that is most utilized as the other discounts are mainly just a method to attract attention from prospective buyers. This discount should sound the most intriguing, but it does not need to be a huge discount that will ultimately hurt your bottom line. A discount that will tie the prospective customer to your business for a long time is a great way to structure your discount. Discounts should make customers feel like they are saving money and getting a great deal, at the same time, discounts should make customers inclined to spend more money than if there was not a deal.
Discounts should make customers feel like they are saving money and getting a great deal, at the same time, discounts should make customers inclined to spend more money than if there was not a deal.
Holiday Special Offers
Holiday discounts are a strategy used by many different companies for good reason. They work. Holidays are not just for retail business, special dates can help create that sense of urgency among your prospective customers and push them to give your business a try, or purchase another product or service from your business.
This may seem useless if your business is not B2C and retail focused. But almost any kind of business can capitalize on the holidays. People are willing to spend more
money around the Holiday, and if you offer them a deal they will probably take it!
Think about which holidays are relevant to your business besides the obvious early winter holidays. They do not even necessarily have to be holidays-- they can be top-of-the-quarter deals that your company offers to other businesses. If you can step into your buyer personas shoes, and determine which holidays they may be willing to spend more, then you will be mastering this strategy.
Exclusive discounts, kind of like the holiday discount strategy, are determined by who your prospective customer is and where they might be looking into your business. Exclusive deals are only for certain segmented customers. For instance, all of your customers who you have segmented into a buyer person or an interest list will receive a marketing email for their exclusive discount. This kind of discount is great for business. It makes your prospective customers feel heard, and engaged with. Exclusive discounts also do a great job of mitigating who is using the discount and preventing too many people from using a discount at once.
An example of an exclusive discount would be offering customers who have not purchased your product in a year, half off of a new product or service they may never have heard of or experienced before. Hopefully, this will engage and then delight your old customers because the new product may fit their new needs. In this case the discount fulfills its purpose, it both delights your customer while getting them to purchase a product or service they wouldn’t have otherwise.
While there may be many great discount strategies that work well for many businesses, these best practices will help you to avoid discount disasters. What works great about these practices is that they focus on who your customers are (avoid casting a wide net with discounts). They are designed to get customers to buy a new product they would never have if they did not find your discount. Whereas discount disasters will hurt your bottom line because customers who were going to buy your product anyways are paying less and there is not a guarantee they will even come back next time. Discounts need careful monitoring and assessment before implementation. You can always discuss with marketing consultants to see if they recommend giving out a discount!
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