Ever since the “Great Recession” that began in 2008, discounting has become a way of life for businesses of all types and sizes. Initially it was a way of trying to sell something – anything – just to get by. But consumers have grown accustomed to discounting and now demand it on a regular basis – regardless of economic conditions.
The notion of offering discounts shouldn’t be frightening to business owners. Done right, discounts can attract new long-term customers, help keep the ones you have and contribute to long-term profitability.
Millions of small businesses offer discounts of one type or another – from regular sales to special offers. But many end up shooting themselves in the foot with poorly designed discounts that are offered with no particular plan.
When competitors offer discounts, the knee-jerk reaction is sometimes to cut prices willy-nilly. But offering discounts without a strategy can be harmful. It’s best to start with a plan and stick to it.
Here are ways to make discounting work for your business:
• Balance strong discounts against your bottom line. Structure discounts that can get customers in the door, but still make money for your business. Look at your product mix and margins.
• Make the offer relevant. Devise a discount that not only will appeal to your clientele, but also one that jibes with how those customers buy from your biz. For example, a “buy one get one free” offer may appear strong on the surface. But if your customer wouldn’t typically buy multiples at the same time, it’s not likely to work well.
• Commit to your campaign. Whether you use postcards, coupon packs, email or online ads, frequency and consistency are important. Prospects may see an offer but not respond right away.
Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.