Special discounts have always been a powerful tool used to attract customers. Whether in the form of a percentage off, free item, buy-one-get-one deals, or others, discounts have proven to drive sales and increase brand loyalty. Determining when to offer special discounts can, however, be a conundrum for many businesses. In this blog, we’ll discuss some of the scenarios where offering special discount can be a worthwhile strategy.
- Slow Sales Periods
One of the most common reasons for offering special discounts is during slow sales periods. Business is not static, and demand periods can vary. Companies that tend to experience off-seasons can use special discounts to keep sales from plummeting. For instance, if you’re a jewelry store owner who noticed a slump in sales during the first quarter of the year, it may be worthwhile to offer discounts on some of your products to keep the business afloat.
Businesses might also need to reposition their products or services in the market. In this case, special discounts can create the kind of buzz required to generate leads. Discounts are a good way to show the market how your products are different and better than your competition. The furniture industry in America regularly uses sales or clearouts to reposition products in buyers’ minds. If you notice that your products have declined in popularity or if you want to change your brand’s perception, then a sale can be an excellent way to get the right attention.
- New Product Launches
Another scenario where companies can benefit from special discounts is during new product launches. Although launching new products can be exciting and promise high profits, it can also be risky. Discounting at this point can get buying decisions moving quickly. Offering an introductory discount on a new product can help businesses introduce new products and build loyal buyers. Launching a new product is also an opportunity to focus on quality and promote customer satisfaction, which will affect your long-term objectives.
- Referral Benefits
In today’s world of social media, word-of-mouth marketing has become an essential tool in growing a business. While there are many ways to encourage word-of-mouth referrals, one of the most powerful is through special discounts to new and existing customers. Referral discounts build trust among your existing customers and can entice prospects to become your customers as well. The online clothing retailer, Zara, for example, provides customers with points for every referral they make, and these points could be converted to discounts on their products.
- Customer Loyalty
Lastly, special discounts can be used to build customer loyalty. Providing exclusive special discounts for loyal customers is a great way to thank them for their loyalty and keep them engaged with the brand. Loyal customers are an essential segment of any business, and it’s crucial that they feel valued and appreciated. One company that has been successful with this approach is Starbucks, who offer their loyal customers personalized discounts based on their purchasing habits.
Knowing when to use special discounts in your business can make a substantial difference. In addition to increased sales and revenue, discounts can help with customer acquisition, customer loyalty, and reputation. However, before offering discounts, it is crucial that you evaluate your goals to determine when and how it will work best for your business. By effectively using discounts, you can grow your business for the long-term.