When Should I Offer a Discount?
Are discounts the golden ticket to draw in customers?
It depends. Discount strategies can be good for business in some situations. But in other cases, they might not work effectively. Sometimes, attracting customers with discounts hurts the brand so do these instead:
Four Strategic Factors When Offering Discounts
- Calculate the Benefits
While offering discounts might seem appealing, it’s essential to calculate the potential benefits and drawbacks. For example, restaurants often made minimal profits from Groupon deals but gained repeat customers in the long run.
- Choose Products Wisely
When offering discounts, choose products with higher profit margins to reduce potential losses.
- Consider the Impact of Discounts
Discounts can mean two things to a customer: First, that you are willing to negotiate on price, and second, that your products (or services) are overpriced. It’s essential to consider how discounts might impact your brand’s perception before giving it away.
- Adopt a Pricing Strategy
In most cases, it’s advisable to price products or services fairly to ensure both profitability and customer satisfaction.
By carefully evaluating the potential benefits and drawbacks, businesses can determine whether discounts align with their goals and strategies. Watch the full video to know more details.
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