When running a business, it can be tempting to lower your prices to get more people to buy your stuff. This move can bring in a tidy profit in the right situations. It can also backfire quite spectacularly in the wrong situations.
Here are a few tips to remember when you're thinking of slapping a discount on your goods and services:
1. Use Discounts To Sweeten Deals – Not Make Them. Consumers who compare products will be attracted by a sale, but you need to be more than the cheapest on the block. Once you grab their attention with a discount, you need to quickly explain why they'd want your product in the first place. Remember – we don't eat sugar straight from the box, but we add it to other food to make them delicious. Discounts are the sugar in this analogy. They'll get people to look your way, but the product still needs to sell itself.
2. Strike A Balance Between Value and Suspicion. Huge discounts may attract attention, but not the kind of attention you want for your business. Marketing yourself as the cheapest option out there creates questions about your reliability. Consumers will start to think that there's a catch there somewhere. Maybe your products are of lower quality. Maybe you're going out of business. This is why you need to give a justifiable reason for your decision to discount your wares.
3. Time Your Discounts to Exploit Holidays. Thanksgiving, Halloween, Christmas, New Year – these are some main holidays when discounts are common. And there's good reason, as people are looking for gifts to give and are in the mood to splurge a little. However, the opposite is also true. You can time sales so they pop up when nobody else is offering a discount. You can cite some other reason to offer a discount – a new product, wedding season, back-to-school, end-of-school, etc. Use a solid enough reason, and people won't get that suspicious when you run a sale when everyone else is cooling down from their own sales.
4. Space Your Discounts to Avoid Fatigue. Constantly running sales will make customers get used to discount-level prices. When this happens, customers will avoid shopping for items at regular rates. They will expect your stuff to be on discount, and will withhold their money until then. This is why discounts need to be properly spaced out. Limit the sales to short periods of time, and then make sure to leave a noticeable gap between sale periods. A month between sales is the bare minimum, with two to three months being the ideal.
5. Add a Charitable Twist to Your Discounts. Charitable discounts that advance a cause can help boost your credibility with certain groups. Students, the elderly, new parents, green lifestyles, cancer patients – these are but a handful of cases where you can mix cause and business together. You can advance a cause of your choosing, while consumers see that your business has a human soul. That, and the resulting boost in sales leads to a win-win-win situation.
6. Encourage New Behavior with Discounts. Are you trying out a new payment method? Do you want people to sign up to a newsletter? Maybe you want people to get your store's new app? Whatever it is, slapping a discount to your products or services can help get regulars to break habit and try something new. Just remember that the discount should be a means to an end. Whatever you want people to try out should be useful and relevant enough to stand on its own.
Chinavasion is a Hong Kong-based gadget wholesaler sourcing its cool gadgets straight from Shenzhen, the manufacturing heart of China. Retailers and consumers alike will be able to avail of a wide array of high-tech gizmos and gadgets, from mini projectors and CCTV systems to Android smartphones and Windows PC sticks.