4 reasons you shouldn’t build discounts in to your marketing strategy

No matter what you sell, whether you’re a B2B or B2C (or combination) business, or how big your budgets are, everyone is concerned with increasing revenue.  When you see a slump in sales, or you want to attract new customers, the first thing many people think about is offering a discount.  It could be buy one get one free, half price or 10% off. You might even go for a special promotion, such as Build A Bear’s “Pay Your Age” day (which has generated mixed results in the past).  We’re all quick to get the shears on our pricing structure in the hopes of generating increased sales.

 

Now, don’t get me wrong. It works.  Or, at least it can do.  Offer a serious discount, you’re likely to get more interest and new people through your door.  It’s why the likes of Groupon does so well, people are always looking for a bargain.  Price cuts can also encourage people to spend their pennies with a new business for the first time, preparing to take a gamble on the outcome thanks to the heavily discounted cost.  There’s reduced perceived risk from the consumer’s perspective.

 

However, is discounting really a good idea as part of your ongoing marketing strategy?  There are definitely some problems with this approach.

 

#1 – You demonstrate lack of confidence

When your product costs X, and you tell a prospective client or customer you’re prepared to sell it for Y, what are you showing them?  You’re demonstrating you don’t have any confidence in the original price.  You’re showing them that it was never really worth X in the first place.

 

That has an impact on the perceived value of what it is you’re offering.  You can sell all the features, all the benefits, all the mod-cons that come with your product/service, but as soon as you start talking about price, that is the only thing your customer will focus on.  All the good stuff will be forgotten, and the price point becomes the focus.

 

#2 – You’re setting yourself up for future problems

Once you offer a discount, there’s no going back.  Whether it’s existing customers that get the discount, new ones only, or it’s open to everyone, people are going to expect you to offer something similar again in the future.

 

People who sign up for three months of a service at half price might decide continuing with the same service at full price later down the line isn’t worth it.  All you’ve done there is sell your product at discount, and ultimately lost a customer.

 

Other people may only buy from you when you make the discount again, knowing that you’re prepared to slash prices when times get hard.  That means you’re putting people off from buying from you at every other opportunity.  Not to mention the fact that people who bought early, and didn’t get the discount, will be peeved they spent more instead of waiting.

#3 – You don’t care about customer loyalty

Discounts are there to entice people who don’t normally spend with you (unless you’re offering it solely as part of a customer reward).  In that situation you’re showing you don’t care who comes to you, as long as they come and buy.  There’s no opportunity to build loyalty when your sales process is based solely on price – next time they need to buy a similar product/service they will simply look around for the cheapest option.  If that’s not you, they will go elsewhere.

 

# 4 – You’re making your sales team work harder

Unless you’re plucking figures out of thin air, your pricing structure is carefully calculated to ensure you ultimately make a profit.  If you take that product/service and sell it at half price, you’re going to need to sell twice as many to keep the same level of revenue.  That’s more people your sales team are going to have to convince to part with their money.

 

 

You are far better working out a sensible pricing structure that not only ensures you are able to make a profit as a business, but that your customers and clients are receiving value for money in the long run.  Equally, your pricing structure should be sustainable – you don’t want to have to change it every few months.

 

 

Case Study: Email and Diary Management

Over the last few weeks I’ve been talking about how you can outsource your inbox to a Virtual Assistant, as well as providing top tips for how to better manage your email yourself. This week I wanted to give you an example of the work I do for one of my clients, and how it’s helped.

Jon runs a hugely successful property management business in Essex. To keep his overheads low he runs a virtual office, with the vast majority of tasks associated with the business either being undertaken by himself and his wife, or outsourced to experts.

He has a marketing firm handle all of his branding and social media, his wife Reenie manages the admin, a bookkeeper comes in twice a month and then there’s me. I’m in charge of Jon’s email and calendar.

So, what exactly do I do?

Although Jon has his own email, only the members of his team know what it is. Every other email comes to the generic “office” email address, which I manage. On an average day we can receive anywhere between 50 and 120 emails per day.

My job is to whittle this number down significantly. Ideally to less than 10.

Every morning I therefore filter the emails and delete any obvious spam. Any newsletters that might be useful in terms of content production I forward to the marketing team, and then delete.

I then answer any obvious queries, for example, requests for information on when work will be completed, or a property will become available again. The answers are all easy to find, thanks to the processes we have already put in place, and it just takes a few minutes to grab what I need and send it over to the enquirer.

Next I focus on meeting requests. These can be 121’s from his various networking activities, meetings with existing landlords or new ones, property visits etc. To save email exchanges taking place I tend to pick up the phone and call people to book them in there and then. There is nothing worse than suggesting a time and date, only for Jon to have filled that slot himself in the time it’s taken the person I am speaking to to get back to me.

Finally, I forward directly to Jon any emails I am unable to deal with myself. Usually these will simply be brand new contacts or potential prospects, as he always likes to be the first contact. Over the last two years, I have never sent him more than 8 emails in one day. Everything else I save him from, which saves him an insane amount of time each day.

The process is repeated during the late afternoon, at which point I also check his calendar and confirm any appointments he has for the next day to avoid wasted time.

Where necessary I also arrange travel, both domestic and international, and send invitations to his database for viewings and any events he is speaking at.

The time he saves in not having to deal with the mundane day-to-day management of his inbox is worth far more than what he pays me to deal with it on a daily basis. He’d be the first to admit that he was sceptical about it all at first, but after working with each other for a few weeks, we got in to a great routine, and he’s never looked back. Most people know that it’s me they’re going to be hearing from, and none of them realise I am not based in the same area (though, my accent probably helps out with this a bit).

 

If you want to find out whether outsourcing your email could bring benefit to you and your business, please give me a call on 0161 883 2024, email lu@timesavingheroes.co.uk or send me an InMail. I am always happy to discuss your options, or provide tips to help.