It doesn’t take a rocket scientist to discover that the average American consumer loves to get a deal where they can find it. This has prompted many retailers and other businesses to offer discounts throughout their sales cycles, especially capitalizing on this potential on Black Friday and throughout the holidays.
However, is it possible that discounts could be hurting your business? Or do these lesser prices bring more customers in?
While discounts can garner some public interest in your company for a short period of time, implementing this marketing strategy frequently could distract from your overarching goals and wear off on your customers after some time. Ultimately, the danger of offering continual deep discounts rests in lost revenue. By offering these discounts, you set your business up to make less than initially anticipated, even though you’ll likely be spending the same amount on production and other costs. It is understandable that you’ll want to offer good deals to your customers, but your business will eventually struggle to make a profit if you don’t strategically space out these discounts.
Another downside of offering too many discounts is that your customers will get used to this cycle and learn to play the game better than you. Your customers may begin to wait to purchase items until the next sale comes around, and if they’ve been studying your discounting habits at all, then they’ll likely know precisely when that sale will occur. However, your business needs to be able to survive financially in between sales rather than only selling discounted items.
How Can Businesses Encourage Sales Without Discounts?
Discounts are a great sales tactic to enact from time to time, but it should not be your only reliable way to garner interest in your company. There are some ways to encourage sales without discounting items or services too deeply.
A few methods your business can implement are BOGO deals or coupons. BOGO deals encourage buyers to purchase a second item while still buying one at full price. Coupons entice customers to stop in to your business, but they have expiration dates that push the buyers to act more quickly. If you have an online store, you can also offer free shipping, which is a proven way to encourage more sales without losing sales revenue.
While discounts do have the potential to grow your business during certain periods, if used too frequently or impulsively, they could end up doing more damage than good.