Some of you will say never to discount price.
Getting your pricing right is an important element of marketing. And to get the extra sales boost you may want to consider price promotions.
One of these is offer a price discount that can be an effective tactic to get more customers.
This article is not about reducing your price to get a one off sales and hope extra business will someday follow.
It is about using discounting in a smart and simple way to get your business new customers and increased sales in short term.
WHEN TO USE
When you are launching in a competitive market.
If you offer a discount price in the initial period, it can reduce the purchase risk for customers. And it can help them to switch from competitors to try your product or service.
However caution should be made if the market is full of commodity products or services. Or if you know your competitors will retaliate with reduced prices, as you do not want to get into a price war.
If there are going to be ongoing repeat sales
This is an old and proven way to get customers to trial your product or service. It can be effective if your business sells subscriptions, ongoing service, software etc.
As a lead in price
You often see this type of price discount when a business knows they can add other products or services to the purchase. You see this type of promotion in the travel industry.
If your product or service is bought on a regular basis.
If they are bought on a regular basis it can attract new customers and reward current customers.
A key factor is to think of price reductions as a short term reward and not one that you have to rely on to attract customers to your business.
THINGS TO CONSIDER
Does it fit in with your marketing strategy?
If it doesn’t then this tactic should not be considered, as it will not help you grow your business. having a marketing strategy helps you avoid the marketing tactic smorgasbord.
Do your sums
This is to see how much extra volume of product or services you need to break even. Before you jump in look at the different rates of discounts, you could offer to see how much volume you need. This is important because if you do not get the volume you will affect the margin and potentially the profitability of the brand.
Will it affect your current customers?
If you decide to offer a discount for new customers, then consider if your current customers who paid the full price will react. A way around this is to ensure you have a customer care program in place so they do not feel upset.
Does this tactic have a good fit with other tactics?
The combination of tactics is what matters to get cost effective results. Otherwise it costs your business time and money.
Don’t use this tactic because your business is desperate for more customers and sales. There are better ways and tactics than reducing prices.
However if you have always said never maybe this is a tactic you might want to reconsider to grow your business.
Over to you. As always, I would love you to share your thoughts about using this tactic to get new customers.
Photo taken from website.
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This article originally appeared on M4B Marketing. It is republished with permission.