The idea of discounting items and reducing prices to attract more customers and increase revenue has come up a few times recently with my clients, therefore I think it was time I gave it some thought and offered a view.
In a world of products and services where we are required to compete with quality, price and above all service, it is only natural at times for us to consider offering discounts and specials with the intent that its rewarding our customers. Or is it?
What is the message we are sending to our customers when we are selling with a discount message? The word discount means;
- in low esteem, low regard
- below par
- not in demand, unwanted
- below the usual norms or price
Being a glass half full kind-a girl I am starting to feel that the word discount is a glass half empty approach with a negative, cheap and unwanted energy about it. Am I alone on this?
The other concern I have about using discounting as a strategy to attract more customers is the concept of attracting one off customers and not quality, long term customers.
One of the secrets to a successful business is being able to remove any enablers that bring your business down to a level of mediocrity. The type of customer you want to attract is one of the enablers that impacts your business success and therefore if you put effort into a discount strategy that attracts a type of customer that may only ever buy from you once, then why bother?
I’m thinking your efforts will pay off far greater and longer term if you attract quality customers that are going to follow you, be loyal to you and continue to buy from you, not one hit wonders!
According to Inc., it costs a business about 5-10 times more to acquire a new customer than it does to sell to an existing one — and on average those current customers of yours spend 67% more than a new one.
In summary; before you pour energy into discounting strategies to attract more customers and sales, ask yourself first, could you achieve the same impact on customer transactions and sales if you rewarded existing customers instead? Sell your product at the right price for the quality you offer, keep your value proposition high with outstanding service and reward the loyal customers after multiple transactions or large spends by giving them something unexpected.
Focus on creating true believers of your business and less one hit wonders!
Go and Inspire