Offering discounts on goods or services is a way to quickly draw in potential customers.
When customers hear that they can save money on products or services they are looking for, likely to use, or even have considered using, a discount is likely to bring their attention to you, even if they had not previously heard of your business. Discounts not only bring new business and attention as a marketing tool, they can help improve your bottom line.
General advantages of offering discounts
1. Attracts Customers. As mentioned, discounts are very attractive to customers and may not only bring new clients, but can also bring back previous customers. Discounting products and services, particularly in-demand ones, is a good way to get attention. Especially in these days of social media, word-of-mouth traffic can increase results on promotions exponentially quickly. Your business is likely to experience increased traffic online or in-store (or both), and a boost in sales.
2. Increases Sales. While the discounted items and services are generally the ones that will garner the greatest sales, the increased traffic to your store or site means that other products and services also enter customers’ awareness and become potential purchases. The increased traffic for one item may lead to purchases of other items while they’re there.
3. Improves Image. There are plenty of circumstances in which a business can offer a discount in order to improve its image. Targeted discounting (like seasonal or locational discounts, or for certain subset of people) can greatly bolster a business’s reputation. For example, if a business was to offer discounts to senior citizens or military personnel, cancer survivors, that business demonstrates compassion and aligns itself with specific audiences (which in turns draws yet more attention).
Seasonal & targeted discount benefits
Every holiday season businesses spend billions and billions of dollars on promotions. But seasonal discounts aren’t just about the holidays; many businesses see a big jump in business during other events like during back-to-school. Major holidays and events like Valentine’s Day, Mother’s Day, Fourth of July, end of season sales, etc. can trigger massive collective spending.
Offering discounts on seasonal items or services is a great way to draw some of that purchasing power towards your business.
Additionally, customers are trained to expect discounts during certain seasons and are likely to be on the lookout for sales and promotions. While this is can be a good thing, as you have customers actively looking for products and services you offer, with so many other businesses out there offering similar promotions, it can become difficult to stand out from the competition. A way to stand out from the crowd of sales during the season is to offer off-season discounts.
Not only will your promotion have less competition, but you are also encouraging and rewarding shoppers for planning ahead.
For example, if you ran a personal training service or a gym, offering discounts on training for the New Year resolutions set in late December or before summer officially starts is a great way to target customers thinking ahead. Or, for the travel agency, you offer travel incentives in March when families and students are planning their summer vacations.
Rather than waiting to offer products that are beginning to lose their luster or usefulness like in end-of-season sales, offer pre-season sales to encourage customers to stock up on what they think they will need for the upcoming season.
Experiment to see what works. Discounts can help your business grow its customer base and improve sales; trying targeted and seasonal strategies as well as off-season promotions will help you discover which is best for your business.