Ever come across a too-good-to-miss discount? If so, you probably know how impactful the word “discount” can be. Standards of living have gone up all over the world. But that means people need to spend more on maintaining them. And when more spending is involved, you can be sure people are looking for any opportunity to save money and stretch their budget.
Discounts fit both these needs nicely. People get a good deal with a great product or service at a discounted price. But do you benefit from a reduced profit margin? Counter-intuitively, yes. Discounts and promotions allow companies like Charter Spectrum cable acquired millions of customers all over the country. Read on to find out the benefits of discounted prices to both your customers and your business.
Attract New Customers and Repeat Buyers
The biggest advantage to offering discounts is obvious. You get a short-term but powerful surge in purchasers. Even people who normally don’t buy your product or service could find themselves interested if the discount is good enough. New buyers would be more willing to try out a new product or service since it involves a lower monetary risk. At the same time, old buyers may make repeat orders as well. A good deal is a good deal, to all types of customers. This would result in a sizeable boost in sales, that would otherwise not be on the horizon at normal prices.
Boost Sales Volume on Your Entire Catalog
Since your discount is attracting more people to your website or store, you can be sure to see an increase in sales. But the increase often does not limit itself to only the items on discount. Many new buyers will definitely be attracted by the discounted offerings. But they will usually also look around at the rest of your catalog and choose an entirely different product/service. In some cases, they may even buy products that are still at full price. This will depend on whether your catalog looks good enough and the offering is relevant enough. But it is not an unusual occurrence.
Clear Out Unsold Items Without a Total Loss
Inventory earns product-based businesses most of their revenues. But inventory management and holding can turn into significant costs. When you’re actively selling inventory, the storage and holding costs are usually factored into the price of the product. But with products that have lived past their expected shelf life, these costs continue to increase the longer you hold them. A clearance sale or stock-out sale is meant to help businesses get rid of unsold products and minimize inventory holding costs. This proves particularly useful in fashion retail, FMCG, and other similar business models with physical inventory.
Increase Progress Against Sales Targets
Having trouble meeting your quarterly sales targets? Is your annual sales volume declining? The strategic use of discounts and promotional campaigns could remedy that situation. At the very least, it could help you offset some of the impacts of declining sales. Sales targets offer direction and motivation, but they are frequently difficult to achieve. You should always test out creative sales and marketing techniques. But you should also deploy discount campaigns at multiple times during a year.
For example, you could offer a sale during the last month of each quarter to flesh out your quarterly revenue. Ultimately, each campaign would lead to a better annual total. Be sure to add a sense of urgency to your discounts with words like “limited time”, “offer expires tomorrow”, “flash sale” and others. It can often prove to be the final nudge impulse buyers need.
Offer Better Value for Money
You may feel you have a great product. But what’s more important is that your customers feel the same way. One way to minimize buyer’s regret is to sweeten the deal with a discount. If your buyers like your product, they would be happy to have acquired it at such a great price. Even if they end up not liking it, you can be sure they’ll be a lot less upset thanks to the money they saved. Consumers generally buy products based on the value or perceived value they offer. The cheaper the product, the more the perceived value for money. As long as your product is great, you can be sure customers will appreciate each dollar saved.
Make Offerings Accessible to a Broader Market
Finally, the biggest advantage of discount campaigns is breaking barriers. Your regular audience may not have too much trouble buying from you at full price. But you may be alienating a significant chunk of buyers with a higher price point. Of course, products or services involving the use of high-quality resources will typically have a higher price than others. But a carefully calibrated discount could get you more buyers from atypical markets or audiences as well.