Offering discounts is one of the ways to attract new customers and build loyalty to existing customers. Whether it is a discount on a deodorant subscription or any other product, it will help build customer loyalty. Customers want to save money and get high-quality products. If you have high-quality products, offer convenient payment methods, and excellent customer service, more customers will shop from you.
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Types of discounts that are attractive to customers
Discount on first orders
To reduce the risk of trying any new products, retailers offer first order discounts. More customers will shop for new products on offer since the risk of losing money reduces when they get a price discount on the first purchase. Some retailers also offer a fair return policy, transparency, and excellent customer experience to build trust and loyalty with customers.
Buy-one-get-one free discounts
Customers and ideally everyone likes free stuff. Free products with every purchase of a specific product will attract more customers.
Customers take time to analyze products and the best options for them. By offering multiple bundle options, you attract more customers to choose the best and most appropriate bundles for them. You also give all potential customers a choice, and its benefits make it easy for them to decide on using your products.
Such discounts apply mainly to online shopping. And one of the main deterrents to online shopping is the cost of shipping. Free shipping reduces costs attracting more customers to shop. It is a form of savings and customers like that.
Why offer Discounts to Customers?
Below are some of the reasons why customers buy products that are on discount. We will also discuss how it can help improve a business’ bottom line.
1. Discounts promote brand visibility in the market
Through creating more awareness of the brand in the market, a company will experience more sales and higher profits.
2. Competitive edge
Customers want to save some money with every purchase. Though the competitors may be offering similar products, customers opt for products with lower prices. By lowering the price of a product through discounts, more customers will opt to buy the products.
3. Promote social responsibility of the company and entice more customers to use the products
Indirectly, discounts enhance sales and profit margins. With the increase in sales, though the price will be lower, the sales go up. Most clients may become loyal due to discounts that they expect from the company in the future. That will also contribute to the increase in sales. Discounts also portray a company as being socially responsible. Human beings are attracted to compassion from people or corporate entities. A business offering discounts will sell more through cross-sales or up sales.
Most traders know that through discounts, they attract more customers. But some of the following mistakes in offering discounts can affect their bottom line.
- Failure to turn the new customers into loyal customers
- Poor goal setting before offering discounts
- The omission of the profit margins in the discount strategy
When a business entity utilizes the discount strategy to win and retain existing customers, it increases sales and profit margins in the long run.