Stop Discounting and Start Rewarding
Discounts are bad. KISS is good.
Stop discounting! It kills your business. When you discount, you lose money at the till. A perfect example is with a $20 discount on a $100 item. Now you only collect $80, not $100 but still away gave $100 in value.
Instead, offer 10% more if your customer loads an e-gift card. For instance, buy a $100 e-gift card, and we will load $110. You just received $100 – $20 more than the scenario above – but gave a value of $110.
Another great way to add value to your business is with a limited time offer like this: Load an e-gift card for $100, and we will instantly send a $20 e-gift card to a friend or family member for free. Again, you received $100 vs $80 in the first scenario.
How much does $20 of value cost you? $10 or less? Discounting $20 will cost you $20. In its place, add $20 of value, which only costs you $10. You received $20 more at the till; net is $90, not $80. Money for you. Value for your brand. Satisfaction with your customer.
I haven’t even talked about deep discounting, let’s look at these coupon companies who require you to give a discount anywhere from 40% to 60% on average and as big as 90% or more. The crazy part is once someone buys your deeply discounted product or service you only get to keep 50% of the money, the coupon company get 50% and now you have to fulfill your promise. STUPID is what comes to mind.
You have a $100 service that you sell on the coupon site for $50. You only keep $25 and it takes 1 hour of your time or staffs time to honor the coupon. You might have covered your wages but what about your overhead? What if you sold 300 deals? How do you honor them in a timely fashion? What happens if a full paying customers comes to your door but you are booked for months servicing the deal hunters?
Have you ever bought a deep discount coupon and become a regular / loyal customer of that business? Didn’t think so… what are your thoughts on attracting deal hunters vs rewarding loyal customers?