Growing your business with a discount strategy
Who would have thought that strategically reducing prices would help grow your business? It seems counterintuitive. Lower product prices equal lower top-line revenue, right? Wrong. You can use discounts to grow your customer base and increase current and future sales opportunities.
Now before you go dropping prices across the board, remember this: shoppers are savvy, and they may see through your efforts. Offering perpetual discounts will likely provide zero incentive or change in behavior. And mass discounting does have the potential to erode the work you’ve done to build your business to-date.
So in lieu of discounting everything, determine what your goals are and how you might drive new customer purchase patterns with discounts. Here are a couple of ideas to get the creative juices flowing:
Introduce new products quickly with a limited batch of coupons.
Let’s say you’re introducing a new product to the market. You’d like to get the product to many customers quickly and gather feedback for future iterations.
Instead of just pricing your product on the lower side, go with your intended price - with a fixed number of coupons. Let prospective customers know the number of coupons available, and that the coupon goes away once enough of them have been claimed.
Because the expiration of the promotion is unknown, limited batch coupons can really drive urgency. With time-based discounts, customers know when the discount is going away. Without that date, they don’t have visibility and may make a purchase earlier.
Create new opportunities with unique coupon codes tied to individual users.
For many businesses, the way to drive coupon-based sales is to offer the coupon to anyone. But there are ways to limit coupons to a certain group of customers. Loyalty program members often receive special discounts, for example.
What if you could tie a unique coupon or discount directly to one customer, and even one particular shopping experience? With all the online tracking mechanisms available to businesses today, there are a number of ways to do just that:
- A shopper we’ll call Sally comes to your website, browses your products, and puts several big-ticket items into her cart. Then she leaves the site without making a purchase. In order to incent her to return and buy, create a unique coupon code tied directly to the items in her cart. Send her an email asking her to review her items, with the discount available just for this purchase.
- Sally returns to your website on another occasion and finds products that are fit for her friend, John. She shares these products with John by posting them to Facebook, and John makes a purchase through the Facebook link. Thank Sally for the referral by sending her a unique coupon code for use on her next purchase.
These examples are just a few of the many pathways to use unique coupon codes. To determine the best fit for your business, look at what’s happening throughout the customer journey. Where are there gaps? What’s happening that you’d like more of? The answers to these questions will give you prime areas to focus on.
Move end-of-life (EOL) products with expiring discounts.
We did mention before that expiring discounts may drive less urgency than limited-batch coupons - but they still have a role to play. And one area they can really help is moving inventory quickly.
Businesses frequently need to sell older inventory to make room for the latest version. Managers generally have an idea of when new products will be shipped or made available for sale, and when older products have to go.
Setting a time-based discount for EOL products can help push items off the shelves quickly. And even if those products will be replaced by future versions, new customers still have the opportunity to experience your brand - and hopefully buy more next time.
A solid discounting strategy can help grow sales - without a lot of ongoing effort.
Strategic discounting may seem like an effective sales driver, but a complex one to manage behind the scenes. However, there are invoicing and billing platforms that offer sophisticated discount logic, so you can put in the upfront time and let the platform take care of the heavy lifting.
Want to know how Invoiced can support a robust discounting strategy? Contact usto learn more.