Discounting & adding value

Wherever you look at the moment there seems to be a sale on. Once upon a time sales happened infrequently, the Boxing Day and January ones were a big deal and people would queue round the block for events like the Harrods sale. Now it seems whatever time of the year and whatever product or service your are in the market for, chances are that you’ll be able to find some sort of discount. Even the website that I found the image for this blog post on had a sale on, you guessed it, SALE POSTERS!

So perhaps at the moment with everyone, consumers and businesses alike watching their spending, a sale seems like a good idea?

Well not always.

I’m a huge fan of rewarding existing customers and clients and very much putting them at the forefront of your marketing efforts. However, what if your sale and promotions adversely affects your income from your existing customers and clients because they too take advantage of your latest offer?

Of course retailers offer products on sales to everyone, new and frequent customers alike, but this is generally to get rid of last season’s stock or less than up to date models of goods. This approach doesn’t work for all kinds of businesses.

Example: If you run a bookkeeping business and you have clients paying you a monthly fee for taking care of things for them, why would you offer them a 25% discount? It just doesn’t make sense. That will just reduce your income by 25% with no benefit to you other than the warm feeling of saving your clients some money. That sort of promotion is better used on a potential client, someone who is interested but yet to bite. Offer them 25% off for the next 3 months and you could convert a lead into a sale and potential long term client.

So what kind of promotion would work and be profitable for you with existing clients and customers? How about adding some value? Instead of giving a discount give something extra for free as a thank you, or give the discount to a service you want to upsell them to. Back to the bookkeeping example, you might also offer VA services so make the discount on that aspect of the business to convert some existing bookkeeping clients to those services. You might be very generous and offer them a free half day so they can try out the service, as a thank you and with no obligation to buy. This allows you to give value and thank the client and hopefully by demonstrating the new service you will pick up new business or referrals.

You could also consider cross promotions with another business who has a similar type of client or customer to you, so the promotion that you offer is actually for the other company – the idea being that they reciprocate and you are able to offer discounted services to their clients.

One thing to be very aware of is keeping your promotions and sales messages very separate. No existing customer likes to find out that new customers are getting your service or product significantly cheaper than they are. Companies that send out the same offers and marketing messages to their entire database, clients and prospects alike do so at their peril.

So what now?

If you’d like to devise a range of offers which will entice new customers, reward existing ones and encourage the selling of additional services and products and work out how to best promote those offers why not give us a call?

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