As a marketer, it helps to ask yourself pertinent questions such as:what motivates your consumer buying decisions?Are consumers rational? It has often been said that consumers do not act purely on logical basis.
More often than not, the emotional part of their brains wins when it comes to making purchasing decisions. Therefore, there are several factors that affect online consumer buying behavior and one of them is product discount.
Price perception is everything. If the consumers think that they are getting a deal, then they will be more inclined to make a purchase. Who doesn’t love bargain products? According to Invespcro, discounts can have a huge, positive impact on your sales.
A customer is more likely to decide to buy a product if they notice a discount on the price. Usually, they don’t worry about whether the discounted price is really lower than the product’s value. The simple feeling of getting a good deal is enough to convince them to make a purchase. This is why most shoppers pay close attention to sales, discounts, and coupons.
When prices drop, consumers will respond. In fact, about 30% of shoppers say that a coupon is enough to make a purchase. Additionally, 83% of consumers say they are more likely to click on an ad that features a promotion or discount. Many studies have demonstrated that well-planned discounts are effective. As long as shoppers feel they are receiving the same quality and quantity for a lower price than before or compared to a competitor, sales are likely to rise.
In addition to improved sales and traffic, offering discounts come with other advantages. Giving your customers a great value for good quality services and goods can increase their loyalty to your brand. This is especially true for new customers. Once a customer has tried your product, they can easily become repeat customers. Also, offering discounts may help you to quickly dispose of old inventory or slow moving products and generate quick cash for other business operations. Sometimes selling a product at 80% off the normal price makes sense. For instance, in the airline industry, the seats that have not been booked have no value to the airline. So it is better to sell the remaining inventory at a discount than flying with an empty seat.
Warning!
Having said that, there is a caveat to discounts. Discounts do not happen in a vacuum. There is always a context. While offering discounts increases sales, it reduces your overall profitability because of reduced profit margins. Before offering discount, one must ensure that the improved sales will compensate for the reduced margins. So unless you are sure to attract enough customers to offset losses due to reduced profit margins, offering discounts may not be a good idea. In that case, you should think of others ways of improving sales.