Discounting can be tempting for businesses and organizations to consider. Especially with our current times. As with any marketing strategy, the need for discounting really depends on the situation and the type of business and organization. If you offer a product and need to push inventory out the door or sales are down, discounting may be necessary. If sales are going well for your company or organization then there is no need to discount.
To determine how best to provide a special offer, you have to understand what is going on in your organization and be on top of sales. Here are some questions to consider.
1). If your sales are down, make sure you have a good understanding of the internal and external environments for your business instead of jumping right into discounting. Here are a few things to consider: Do you have more competitors offering your product/service? Is something in your organization not going smoothly? Do people not have a need for your product/service as it currently exists?
2). Review and fine-tune your messaging. It is good to be consistent with messaging but if your offering is not well-explained in the first place, your prospective customers may not understand why they should buy. If customers don’t understand why they should buy, they may buy only because of the discount and not value the purchase. Especially in a service environment, this can lead to vendor shopping.
3). Consider the long-term effects of discounting over time. If you are always discounting, what is the perceived value you provide to your customers/donors? Will they ever be willing to pay full price? You may have devalued yourself to the point where customers don’t appreciate your offering and only buy because they need to and you are the cheapest.
4). Understand your customer and measure how they respond to offers. If you are looking for customers to purchase more of your product or services, test offers and consider a customer loyalty offering versus a discount each time they purchase. Customer loyalty offerings can allow you to provide special perks to those customers that purchase from you most frequently.
5). Make it easy for your customers/donors to work with you. Nothing can turn off a person more than bad service and the negative word of mouth that goes with it.
6). Test marketing channels for special offers based on where your customers are likely to see your messages. Know the demographics of these channels to make sure you are reaching the right audiences.
7). Instead of a discount, consider offering a gift with purchase or free initial consultation.
We hold on to some of our favorite articles and found these valuable on the topic of discounting.
Golden Practices Blog: Tired of Competing on Price
The Right Way to Offer Retail Discounts
Can your Brand Afford to Discount? from Marketing Profs
Do you have any other tips to share when it comes to discounting? Please share.
Susan Schoultz is Client Service Director at Clear Verve Marketing and works with clients to plan, create and execute marketing campaigns. Follow her on Twitter as @clearverve2.
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