Discounting — extending special offers as a marketing tactic — can bring new customers to your business or help new or slow-moving products or services gain a foothold. But there could be a downside for your brand’s image.
Done with the correct marketing strategy in place, extending special offers can be an effective marketing tactic that can help with growing your business, introducing new products or services, attracting new customers and increasing sales. Conversely, without the right business strategy in place, extending special offers could actually impact your cash flow negatively, damage the brand of your business or alienate your best customers.
Here are some questions to consider as you plan marketing campaigns that require discounted special offers to help avoid negative outcomes and generate positive results.
Marketing and Discounting: 6 Ways Special Offers Can Hurt (Or Help) Your Business
Are your special offers bringing in new customers or increasing revenues and profits – or are you simply training your customers to wait for the sale?
Extending special offers could be the means of training your customers to wait for sales on their favorite products or services. Or worse, they could be negatively impacting the value that your customers place on your products or services.
- Don’t put products or services on a predictable discounting schedule
- Don’t discount single products or services (customers may be left with the impression that you’re overcharging or that products or services aren’t worth the regular price); instead of discounting, create promotions in terms of add-on value or bundled special offers
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Are your special offers going unnoticed?
If you constantly extend special offers in the hopes of attracting new clients or introducing new products or services but the results are rarely – if ever – what you’d hoped for, the problem might not be your offers, but rather, in how you are communicating these offers, and the audiences you’re reaching (or not).
- Proactively reach out and connect with members of your target audiences where they are
- Establish strategic marketing partnerships with organizations whose patron base overlaps with one or more of your own target markets
- Find out how your customers would prefer to receive communications from you – and communicate with them using those channels; if you have permission to send marketing messages, your customers expect you to do so – they’re much more likely to be disappointed if you don’t, than if you do!
Are your special offers regularly under-unredeemed?
Barring a lack of communication, if you are creating specials that no one seems to want, maybe it’s because they don’t need or want the offered product or service and are not placing value on the “special”. Stop guessing and put tried and true marketing tactics to work to help you craft special offers that will attract ideal customer types and produce the revenue and the results you desire.
- Hold focus groups at your business or even online to discuss your products or services and the types of offers to which members of your target markets would be more likely to respond
- Putting a special offer on something no one wants – especially if done repeatedly – is only going to reinforce the perception that that product or service is sub-par, and may cause members of your target markets to tune out future offers as well
Could your special offers be over-redeemed?
As many who participated in Groupon© and other daily deal programs learned, without the right margins and limits on the types and number of special offers you can reasonably fulfill, you could be leaving your business open to crippling financial loss or making promises you don’t have adequate staffing or inventory to honor. Careful and strategic planning, forecasting and having contingency plans in place for emergency staffing or purchasing extra inventory or supplies should be part of your marketing strategy when it comes to special offers of this magnitude and by all means pay close attention to your margins to ensure you are seeing either direct or in-direct profit!
Is your special offer really special?
Extending a “Friends and Family” sale to everyone’s friends and family isn’t really special – is it? Likewise, offering up something no one wants isn’t so special, either.
- Two things must be true for a special to be special; it must be a compelling offer, and it must be for something people actually want!
- Don’t throw around phrases like VIP, Exclusively for… Friends and Family, etc.; rather, create meaning for these types of special offers by making them truly exclusive to your best customers or members of your “ideal customer types” based on your buyer personas
Last but not least, is a special offer likely to damage existing customer relationships?
Extending special offers only to new customers might make your current customers feel under-appreciated or over-charged. Take care when using special offers to attract new customers that you don’t risk relationships with your current customers in the process.