You are shopping for a new family car. After months of research, you zeroed in on one model, took it for a test drive and fell in love. But there is a catch: the price makes you uncomfortable. You have the money, but even if you like the car, you just can’t pull the trigger. Now imagine that the sales rep offers you a big discount and suddenly the price works for you. Of course it is. Why would you shell out the extra money – or walk away from something phone search australia you really want – when you can get it at a discount?
There’s a reason for that: years of conditioning have made us believe we should wait to buy until there’s a discount. Statistics support this claim – a survey conducted by RetailMeNot reveals that discounts have a significant influence on customer acquisition, brand loyalty and consumer brand perception. “Consumers today want to feel like they’ve spent their money in the smartest way possible, and to do that, they leverage offers throughout the purchase journey, including when they decide where to shop and what to buy,” says Marissa Tarleton, responsible marketing manager at RetailMeNot. But here’s the thing:
Understand the Timing
Discounts work differently from the seller’s perspective. And if companies aren’t paying attention to discounts – if they don’t strategize properly – it can all backfire in a big way. Here are 5 key lessons businesses can use to implement pricing and discount strategies that work. Although most of these examples relate to SaaS businesses. Rhey can also be applied to other industries.At all times, businesses should consider offering discounts to their customers, but not without knowing their own profit margins. Discounts can kill a company’s cash flow if offered in silos, disregarding sales commissions and finance team data. But how do you determine the ideal discount percentage? It’s a tricky question, but luckily you can do a little math to answer it.
Discounts Don’t Have to Last Forever
Before sharing why this is a bad idea, let’s talk about the quality and price of the products. Now, I’m sure you’ll agree with me here: flashy and expensive store-brand products are often considered high quality, and they’re rarely discounted. The logic is simple: the attention to detail justifies the price. As customers, we don’t expect to get a discount when we shop at Calvin Klein, Gucci, or even Nike. Yes, we line up outside the store when a sale takes place, but the fact is that we would definitely question the quality of these products if they were on sale 365 days a year. The reason is simple: discounted products are often seen as low quality. Discounts don’t have as much of an impact on B2C products as they do on B2B products. For B2B companies, continuous discounts can be crippling.