Constant sales and discounts can cause damage to your brand even if you’re talking to an endless parade of customers. Discounts can devalue your products when every time clients visit your site they see that you’re on sale….again. But, there are ways to offer price breaks without devaluing your products and services.
I tend not get excited about sale prices because nine times out of 10, you can get a deal. In consumer behavior, sale prices tend to represent what you should really be paying for something. And that is the downside to discounts. They can destroy your price integrity because people know you’re not taking a loss on the product even when it’s on sale.
On the other hand, sales can excite and attract buyers so when done right, they can be an effective way to drive sales and align with new like-minded clients. However, many business owners use discounts too flippantly and frequently because they like the positive sales high, and do not fully understand the negative effects they are having on their long-term branding.
Your price isn’t your brands only competitive advantage. Customers will pay a premium for goods that give them more perceived value. When I coach sales teams, I focus on not selling on price but selling on value for that exact reason! To maintain a higher price point, you must be adept at selling value and not offering discounts to close the sale. When you sell on price, later, getting the same customer to stop thinking about price and re-focus on value can be very difficult.
Although discounts are exciting and can peak people’s attention, sales pricing also draw in a different type of consumer. More often than not, they are probably not the type of customer who will see the value of your brand long term. In fact, low price point clients tend to be hyper-critical of your offering and will not lead to the positive word-of-mouth you’ll need to create true brand advocates.
Discounts can lead your buyers to ask themselves why your price can be discounted. It’s consumer behavior that they wonder why they can't get that price some other time. And possibly worse, if they recently paid full price for a product/service that is now on sale, they may feel cheated. I know I certainly feel that way! Perception matters with branding and that’s why it's imperative that you always give a good reason for the discount. Unless you plan to compete on price continuously with price-conscientious customers, you can't have predictable sales or flexible terms.
There are ways to offer discounted rates without devaluing your brand. These tips can be tweaked for either e-commerce or retail store.
The first is seasonal sales like Black Friday. You’ve most likely had experience with seasonal sales in the past and using your holiday calendar to create a set of promotions throughout the year. These sales are a way that any business in basically any industry can have a discount at that specific time of year with few negative brand ramifications. Customers are now trained to expect Black Friday sales that start around Halloween now. I encourage you to think outside of the seasonal sales due to the amount of promotional competition that happens at these intervals.
In addition to seasonal offers, you can use sales to modify consumer behavior in other ways. One of my favorite ways to host sales is to offer volume discounts. This type of discounting makes sense in the buyer's mind. We are trained to expect that the more we buy, the cheaper things will get. So customers are generally not skeptical or resentful if you give this type of discount.
Another way to have behavior modifying pricing is free shipping thresholds to increase average dollar value. You can even try free gift with purchase thresholds which offer a good incentive and helps promote other products you offer! The thresholds for the price breaks just need to be realistic to the common consumer.
For the online sales portion of your business, you can do periodic site-wide sales, but I highly recommend these big bursts happen at short flash sale intervals (72 hours or less). You can simply add a banner to notify site visitors. If you can, add a countdown for the deal to increase the sense of urgency and reinforce that your goods aren’t found at those prices generally.
One of the most successful types of sales I’ve seen is VIP-only sales. These work because they are only promoted to a small part of your customer base and they reward your best clients! If you’re launching a new product to your offering a VIP-only sale is a special way to make an introduction & promote the excitement of your product expansion. This promotional strategy makes your customers feel special and they get access that no one else is getting! After your sale ends, you can follow up with people that bought to have them share their experience with your newest addition and get the invaluable feedback you just can’t get during R&D.
As for using discounts to attract new customers, be strategic and choose one product or service that's designed to be the one thing you use to drive traffic. Then decide the frequency that particular item is on sale. This way, your brand isolates the discounting damage to that one item and you can keep the pricing integrity and value of everything else you offer.
Remember: you need a good reason for a discount to lessen the potential damage done to your price integrity, brand reputation and relationship with VIP customers. Sales can be a wonderful way to modify and reward the behavior you want from customers, including buying now or in greater quantities.
Maintain your price integrity and sell on value and unique beliefs instead of bargain basement pricing. When you reframe to get sales this way, you attract the long-term buyers you’re truly after not just a flash in the pan that disappears as soon as the sale is over.