How to Increase the Effectiveness of Discounts: 5 Simple Tricks
Discount is one of the most popular and possibly the most effective tools used to increase sales. Despite this, it is important to consider many different factors to ensure a positive result. The drop in prices will certainly attract customers. It is worth remembering that the misuse of discounts can ultimately significantly reduce your bottom line.
Based on this, if you want to run a sale, it is important to carefully plan your promotions and develop good deals to meet your business goals. We've put together 5 tips for you to get the most out of your discounts.
1. Define your goals.
There can be many goals behind discounts: increasing short-term sales, selling obsolete inventory, rewarding customers, and so on. It is important to understand what purpose you are pursuing. One of the biggest mistakes you can make is not setting specific goals and objectives. Before running a sale or offering new promotions, make sure you have clear goals for doing so.
The more detailed and thoughtful the goal is, the more likely it is to achieve the desired result. Having a clear understanding of the discount goals will allow you to make the right decisions about what products to put up for sale when to do it, and, most importantly, how much discount should be offered to customers. It also affects the ability to measure your performance, so you can figure out how to improve it in the future.
2. Use discounts to reward customers.
Reward programs are a great way to build customer loyalty. In exchange for consistently choosing to buy your products over your competitors' products, customers receive exclusive deals that help them save money.
The first step in creating an engaging reward program is to figure out what your audience wants. This is based on what you know about them. Ask yourself questions such as which products are most frequently purchased by repeat customers and what types of rewards they use the most.
Then segment your customers into groups so that you can create specific bonus programs for different types of customers. For example, let's say you have a clothing brand that targets both men and women. Create a reward program that allows each segment to accumulate rewards, points, and more that can be used for specific purchases.
3. Personalize your discounts.
This approach is a little more difficult to implement, but it is one of the most effective. The idea here is to offer the discount at the right time, which means that you must add an element of personalization to the use of discounts. For example, it doesn't make sense to offer a discount on shower gel three days after purchase, but it will be relevant after four to six weeks when the customer is almost out of product.
Likewise, you can offer favorable prices for related products, such as a percentage discount on your body cream. Or, if you're looking for a simpler approach, you can start by personalizing your email - even something as simple as including a customer's name in a message can make a great value.
4. Know the psychology of the buyer.
It's no secret that shoppers don't like to add and subtract while shopping. For example, if you offer a 20 percent discount, it probably won't be as compelling as being able to save $20 when you buy a $100 item. This is the psychology of pricing. This simple example demonstrates the importance of how you present value to your customers. It is better to immediately focus on the opportunity to save money than to offer to calculate the cost. But don't forget that there are different discount methods for every type of business. And which one is right for you - you can find out by studying your audience in detail and offering various options.
5. Set deadlines.
Create a sense of urgency. If you give a customer six months to use the discount, they will probably wait until the last week, keeping you waiting.
Every time you launch a discount, try to inspire a sense of responsibility in the customer. So, for example, if you list a 24-hour sale with your marketing company, shoppers will know they can only take advantage of a better price on that particular day. The sooner they acquire the product, the sooner you will be able to evaluate the result that you expect at the very beginning.
Use discounts not only to increase sales, attract new customers, but also to delight people and make them at least a little happier! This determines the value of your business - the benefit to the buyer.