The Marketing of Discounts

The_Marketing_of_Discounts

Before embarking on a discussion of how to market discounts, let me caution you about the usage of discounts. Discounts may give your product an image of low quality. Would a real diamond be worth buying if it started selling for a dollar? In some cases people desire items because they are expensive. Also people tend to associate quality with prices so if you start resorting to too many discounts you send the wrong signal. Also competing on prices can trigger off a price war in the market where you could eventually be forced to shut down. Hence, prices are not a good way to compete. Differentiating based on quality or service would be much better.

However, there may be certain types of discounts which can be used to boost sales and manage inventory. Discounts can be of various sorts and it is important to choose wisely based on your target audience. Bulk buying discounts and seasonal discounts are used to increase sales whereas cumulative discounts such as through loyalty cards increase brand loyalty as well. Whatever discounting method you decide to use, it is important to market it optimally.

With optimum marketing, your discount offer will yield better returns.  Should you advertise 25% off or should you say $2 off? In this case a percent value seems larger than the actual dollar amount. However, what if the actual dollar amount was $2000 and this was also 25% off. In this case the actual dollar amount could attract greater number of buyers.  This means that if the actual discounted amount exceeds a certain amount, then it makes sense to use the dollar value and if it is less than a certain amount then it makes more sense to use the percentage value.

Once you have chosen between using a percentage or a dollar amount, what words will you use to attract maximum numbers? Should you use the word sale, discount, off or save to get the most impact? Why not ask the customer? Not literally because if you do ask the customer, she may not be able to give you a right answer. Actions speak louder than words. You could use call tracking to test the results from using each of these keywords. A/B testing would allow you to use the exact words that appeal to your target market.

All in all, correct marketing can ensure that when you offer a discount, your diamond still remains a diamond.