Discounting has been used for a long time to encourage customers and potential customers to make a purchase. Even if it isn’t a brand-new approach, it can still be extremely effective for your company if used wisely.
Discounting is a natural desire for almost all clients, but for all businesses – including your company – it is undoubtedly the most important price strategy. However, it necessitates a lot of caution when carried out.
The issue emerges when marketers frequently provide their entire audience sitewide discounts without taking into account where visitors are in the buyer’s journey. While it may draw people and increase sales, it can eventually affect your bottom line.
Do you want to know the best discounting techniques and strategies that can keep your client leads growing without “killing” your profits? If you said “yes,” then continue reading.
It’s vital to first look at some fundamental ideas of the discount marketing industry before delving into specific company tactics.
Discount Pricing Strategy: The Fundamentals
1. Pricing Strategies
Naturally, after conducting a marketing research, every single organisation must create a pricing strategy for a good or service they offer. Demand is predicted and decisions are made regarding distribution, positioning, and promotion of the product or service. All contributing elements, such as the cost of the product or service, the competitive environment, and the desired level of profit, are taken into account when developing a pricing strategy.
A full price approach, competitive pricing, discount pricing, or a combination of these pricing options are all viable pricing strategies.
2. Discount Pricing Strategy
One form of pricing strategy is to mark down the prices of your products and services. A discount pricing plan often aims to increase client traffic, get rid of excess inventory from your store, and raise sales. To avoid relying on discount pricing for extended periods of time, the majority of organisations use alternative pricing techniques.
Let’s move cautiously with discount pricing techniques once more. You can end up losing money if you keep lowering prices. If everything is constantly discounted, your buyers might not perceive a need for anything or a sense of urgency. A downward pricing cycle that could eventually harm your ability to provide the service at full price is also started by discounts that are used excessively.
Additionally, you can’t only rely on sales prices. Since they can purchase in quantity, it is evident that big firms frequently charge lower costs, making it difficult for small enterprises like your company to compete. You must therefore pay great attention to the distinctiveness of the services you offer and periodically give discounts to those who are the most successful.
3. Types of Discounts
There are a few common discount categories that are definitely worth your attention:
- Quantity Discounts
Offering quantity discounts to clients who make large purchases or use numerous services at once is becoming more and more common. Additionally, it typically honours consumer loyalty. These savings may be cumulative, as in the case of rewards programmes that provide free merchandise after a specific number of purchases or discounts offered to clients who make numerous minor orders or bookings. - Seasonal Discounts
Such a discounting approach tries to increase sales at the start of peak seasons while also rewarding customers who make purchases during off-peak times. - Promotional Discounts
If you want to attract customers and increase sales, think about providing promotions! You provide these reductions for a brief period of time.
Some companies decide to run specials around holidays or other significant occasions, like the New Year’s holiday. Among the promotions you can run are:
- Buy One Get One (free or half price)
- Percentage Off Certain Items
- Loss Leaders
These are items that are on sale to entice customers into the business in the hopes that they will also buy more lucrative goods or services. Loss leaders ought to be well-known, frequently utilised brands. Additionally, merchandise should be rotated frequently to keep people interested.
After learning the fundamentals of discount marketing, it’s time to move on to the most important section of our article: the best practices for a successful business discount campaign.
Best Discount Strategies
#1. Nudge New Visitors with a Special Offer
A visitor may not be prepared to “purchase” when they first arrive at your website.
There is a good chance that they are still looking for the best service providers to handle their product issues. They may visit various websites, conduct searches, and then compare them.
So it’s not always a good idea to give them a discount code to use as soon as they arrive on your website. You should ask new visitors for a smaller commitment instead of asking them to make a purchase so early in the buyer’s journey, such as their email address in exchange for a discount voucher.
Planning such a promotion for your new website visitors requires that you:
- Target a Specific Visitor Segment
Place a cookie in the browsers of new visitors to ensure that you are only providing this discount to new site visitors. By doing this, you can distinguish between new and returning visitors and decide whether to display or hide campaigns for them. - Refine your Discount Campaign by Personalisation
Make sure your target audiences are aware that the offer is only available to them after you have defined your target group. Your message and offer become more pertinent as a result of their sense of being “special,” which does aid in raising your conversion rate. - Give People a Reason for your Discount
Naturally, you should give customers a reason to accept your discount. The finest thing is that it still functions even when the cause is clear. For instance, it might be as straightforward as in the example above, where new visitors receive a discount.
#2. Reward Loyal Customers
Building customer loyalty actually begins the first time they connect with your organisation, and it takes a lot of work and patience to convert first-time customers into devoted ones. Fortunately, discount pricing strategies have long been regarded as a super-effective way to build loyalty.
The bulk of loyalty programmes includes discount marketing. However, it’s crucial to first identify your devoted customer before you develop a programme structure. Avoid the usual error of attempting to force everyone into a programme! Such a tactic frequently fails but wastes resources because hundreds of cards are sent and eventually forgotten by recipients.
So how in the world could you pinpoint your intended market for such loyalty discount strategies?
Amazingly, the solution is straightforward: a group of devoted consumers is one that includes the audience segment that generates the most revenue. Perhaps they are clients of your organisation who frequently request roofing services from you for their huge construction projects. The goal is to develop trusting relationships with them and express your gratitude in order to win brand advocates as well as loyal customers.
According to one study, 76% of consumers desire personalised offers based on past purchases.
Therefore, the discounts you prepare should be unique, exceptional, and tailored to the faithful portion of your consumer base.
Additionally, the kind of deal you provide and how you deliver it to your devoted customers are both crucial. Each communication containing a promo code or gift card ought to make the recipient feel as though they are receiving something “special,” as opposed to the usual. Giving a customer information about how few individuals received the offer you just offered them in the message is a workable way to create this “special” sense.
Because of this, your loyalty program’s use of discount marketing greatly depends on how it is created. Although there is no one magic formula, for the best results, you should combine customised discounts with gamified experiences and a multi-level reward system.
#3. Celebrating Discount On “Big Dates”
By honouring the occasions that are significant to your clients, in addition to the loyalty programme, you may encourage their loyalty. Adopting such a sophisticated personalisation strategy necessitates more work on your part in focusing on certain customers, which also explains why you shouldn’t overextend your loyalty section.
Birthdays and anniversaries make excellent occasions to surprise your most loyal clients with a promo code or gift card. Even a tiny birthday coupon gift, which could seem like a commonplace concept in discount marketing, might nevertheless be a pleasant surprise that your customer will cherish.
Make your message very personalised and the discount aesthetically pleasing—again, this is the tried-and-true recipe for success. If you are unsure of what to offer a customer, simply review past orders or reservations to see which deals and service options would be most appropriate.
#4. Reward Referrals from Existing Customers
If you’ve been in the business world for a long, especially in the service industry, you must be aware of the importance of referral marketing.
The issue is that few businesses incorporate a reliable and repeatable referral system into their marketing strategy. And the data is quite telling. According to ReferralCandy, 83% of happy consumers are eager to recommend goods and services. But just 29% do so in reality.
Discounts are a good way to encourage customers to recommend friends and family. Therefore, you should never undervalue the value of referrals or disregard the requirement of creating a well-designed referral-rewarding discount!
#5. Increase Discount Offers During Holidays/Special Events
Event-based discounts typically occur around a specific day or season, and they are frequently reoccurring. Most individuals are in a “purchasing mindset” around holidays or special markdown days (such as Black Friday). If you offer discounts during these special occasions, your company might benefit from the surge of clients.
Individuals and families often want to purchase items on specific holidays, such as Valentine’s Day or New Year’s Eve. So, why not take advantage of the increased traffic over the holidays and direct your visitors to appropriate offers?
It’s also a clever “move” to offer a discount in times of need, such as natural disasters like hail, wind, or storm, if the product may aid the clients.
In Conclusion
You must take a strategic stance if you want discount pricing techniques to succeed. You can avoid the problems associated with discounting and instead increase the number of quality leads and service revenues for your company by clearly outlining your goals and aligning them with the appropriate kind of pricing discount.
Building discount tactics for your business already involves a lot of preparation and communication, but maintaining an internet presence for your service is essential to igniting your company’s profitability. Please contact us for a quote if you require assistance from a committed team to help you expose your company to the online market.
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Latest Update on February 10, 2023
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