Special offers and discounts can be great for your business. 90% of online consumers search for a discount before they purchase and 66% of consumers try out a new service or product on the basis of an offer and spend more.
However, if your business has small margins, running loss-leader campaigns can be dangerous. So, is it ever worth doing special offers?
1.Discounts can help but they can have disadvantages to them
Special offers can drive sales, they can help get rid of stock you no longer need and can create brand loyalty in certain demographics if your offers are aimed at them.
However, it can devalue your brand and create a lack of confidence. People can get used to your lower prices and might not be willing to pay the full price.
2.Have a really good reason as to why you’re discounting
Don’t just discount a product because you think your product or service is not quite up to scratch with the market leader because you’ll struggle to claw it back. If you have a good reason to discount then you’ll never be undervaluing your product.
3.Ensure that it is manageable
Make sure that you really know what your margin is on each product or service, don’t just pick an arbitrary discount, so you don’t end up cutting into your margins
4.Limit the discount
It has to be either for a limited time period, it has to be for a limited number of people, or it has to be on a limited number of products. You can’t just have hundreds of discounts.
5.Review it regularly
Check your analytics. there’s no point of running discounts if you don’t know if they are actually working. Or if you don’t know who’s using them. You need to be able to see if the discounts are helping or if they are making things worse.
Something to think about
Be fair to existing customers. If you have loyal customers who have been with you for years and all of a sudden new customers are getting a better deal, your existing customers will feel there is no loyalty with your company, and you may lose customers because of it.
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