Providing your customers with an enticing discount is a great way to quickly boost sales and see some income into your business. However, discounts can also become a slippery slope that your business can get stuck on, ultimately lowering sales and hurting your brand—something no business wants. So to help you make smart decisions regarding how and when to offer discounts to your customers or clients, here are three tips you may want to remember the next time you’re considering giving a discount on your products or services.
Consider All Types of Discount Offers and Incentives
While offering a monetary discount on your actual products or services is a common practice for many businesses, that may or may not be the best route for your company to take at this time. If you’re feeling a little uneasy offering a financial discount to your customers or clients, there are a few other ways you can offer incentives without dropping your prices below what you’re comfortable with.
Richard Lazazzera, a contributor to Shopify.com, shares that there are multiple types of discount offers and incentives you can give your customers if you’re looking to show them your appreciation. These include percentage discounts, dollar value discounts, free shipping and free gifts with purchase. Consider what your customers will most appreciate and what you can most reasonably afford before you make your discount offering decision.
Don’t Offer a Discount As a Last Resort
Although it was mentioned previously that offering discounts can be a shot in the arm for your sales, Maria Malidaki, a contributor to SixRevisions.com, warns that discounts should never be given as a retention strategy but rather as a way to show how much you value your customers. If you use discounts as a last resort to keep or acquire more customers, you may end up having to lower the quality of your products or services to keep up with the lowering sales prices. This could have a detrimental effect on your business, potentially causing you to lose your business entirely due to a lack of funds. Make sure that if you’re offering discounts, you’re doing it for the right reasons.
Know Where to Draw The Line
Once your business gets into the habit of offering price discounts, it’s important to know where you plan to draw the line on your generosity. Kevin Casey, a contributor to Intuit QuickBooks, states that offering too many or too large of discounts can cause problems like devaluing your brand, having trouble charging full price, getting into price wars with competitors and more. To avoid falling victim to these problems, decide once and for all your company guidelines for offering discounts.
Discounts can be a huge benefit to your business when done correctly and with the right intentions. Use the tips mentioned above to make sure you’re in proper alignment with the best business practices when you next offer your customers or clients a discount.