Customers are getting addicted to discounts. For some, it’s a way of coping with recession and high price inflation; look for discounts to stretch the household budget that little bit further. For others, it’s a way to afford luxuries on a limited budget; and for a hardcore few, searching out those discounts is a hunt that brings a real sense of achievement, a game they enjoy for its own sake.
One thing we do know is that discounts are addictive. Getting a good deal releases serration, the ‘feelgood’ brain chemical, and gives the buyer a little ‘high’. If you’ve ever got a super bargain at a flea market or estate sale, you’ll know how that feels.
So if you want to boost your sales, successful sales promotions are a must. But there are different ways to provide discounts, which will appeal to different types of customers. You also need to protect your margins, as every percent off that you give a customer is a slice of your profit that you’re giving up, so you need to be sure that you’ll attract more in sales than you give up in margin.
The easiest way to promote sales is to apply an overall discount. “Closing down sale, everything half price” is a good example. But this isn’t very targeted, and can mean you’re selling at a loss, which is why it seems to be used most often in closing down sales!
It’s better to target particular products that you want to promote. For instance, you may have a product which used to sell quite well, but it’s been lacking in sales velocity recently. Why not use a significant discount to try to boost sales back up again?
New products can also benefit from discounts. You can even offer a discount on pre-orders to get a new product off to a good start.
Offering multipacks and bundle discounts can be a great way to increase your average order size. If a customer was going to order four lipsticks, but you have a multipack of five available for a price that’s not much higher, you’re probably going to get that extra sale. Bundles can sell really well if you’ve thought through your customer’s needs; for instance, beginners’ kits for crafts or art, or even for cooking. A top seller for one shop is a sushi kit that includes all the tools you need, rice vinegar, soy sauce, and sushi rice; the only thing the buyer needs to add for themselves is the fish!
Don’t forget that there are a lot of ways you can stay in control of your discounts. For instance, you could limit purchases to one per customer. You can offer discounts for a strictly limited time, through an Amazon Lightning Deal or a coupon campaign, or up to a limited number of products. Communicate that to your customers and you’ve automatically introduced scarcity value and urgency; will they be able to resist?
Exclusivity is another way to give customers some extra motivation. Use a coupon code on your social media, or in an email newsletter, and you can make your consumers feel special.
You might decide to use flash sales to iron out some of the seasonality in your revenue. (One bar reduces its beer prices in January, which is always a tough time for the hospitality industry.) Alternatively, you might use seasonal deals around holidays to ensure you grab a good share of the business. Always have a tactical reason for your discounts, and always work out the numbers first! How many discounted offers do you have to sell to be better off than if you’d stuck with your original price?
