The Best Ways for Your Business to Offer Discounts

Offering discounts is a great strategy for businesses to achieve recognition and inspire a new source of leads. When discounts are offered effectively, the short-term losses are dramatically overshadowed by long-term increases in customers and overall profits.

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Offering your products or services at or less than retail value, to the point where profit is nonexistent or minimal, may seem very risky. However, a prudent discount strategy is well worth the risk.

The Power of Increased Reach

Discounts increase traffic to your business, whether it's actual foot traffic or in the form of virtual web visitors. Limited-time discounts are particularly lucrative, as they force prospective customers to act now – or very soon – to purchase the product/service for fear of missing out. Increased traffic typically results in increased sales, which is something every business wants.

One especially cool aspect of discounts is that they provide free advertising. There are a variety of communities and forums devoted to finding discounts, so any worthwhile discount is very likely to appear there. In addition, business owners typically won’t be looked down upon for promoting a discount, as long as it’s legitimate. People don’t mind being told of a new business if they’re offering something they want at a lower price.

The Attainability of Sales Targets

For businesses that are projecting to report significantly under their sale targets for a period, discounts can serve as a quick boost that, when implemented properly, can make up for a subpar week or month.

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One effective method to offer discounts with sales targets in mind is to offer them during a particularly dry period. If you notice a month or season results in slow business, aim to achieve more traffic by using discounts as a promotional tool during that time. This will make achieving sales goals much more feasible.

The Appeal of Customer Loyalty

Businesses with no customer loyalty constantly have to devote resources to finding new customers, while those with customer loyalty can instead focus their energy on improvements and logistics. The business with the better long-term prospects between these two is obvious, showing why customer loyalty is very important toward molding a business’s success.

Discounts encourage customer loyalty, as new customers with a first impression of going to a business and getting a great value will remember that as their first impression. Therefore, they’re likely to associate future visits with value and satisfaction. A good first impression can go a long way in developing customer loyalty, for both brand new and long-term customers.

The Value of Senior and Military Discounts

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While discounts should generally be universal regardless of age or background, sometimes it’s appropriate to accommodate seniors and military more than most, due to inaccessibility and sheer respect. In addition to providing positive PR in making the business appear as respectful toward seniors and veterans, offering these kinds of discounts can capture a demographic that is more accustomed to brick-and-mortar stores. It will also generate potential word-of-mouth buzz.

This can depend on your product and demographic. Let’s take a look at Wing Tactical. They sell firearms, parts, and gear. They’re likely to attract a large number of customers who are/were in the military and law enforcement. So for them, it makes a lot of sense to offer that type of discount. On the other hand, a company who sells children’s clothing wouldn’t have as much need for a senior discount.

Easy Inventory Turnover

Most businesses are familiar with overstock, when there is simply too much of an item to sell considering the store space. In this scenario, discounts reign supreme as a method to quickly open up space and get rid of old inventory while still getting something out of it, even if it’s lower than retail value. When you have too much of a particular item and it’s simply not moving off the shelf, it’s very worthwhile to provide a visible discount on that item.

The Value of Senior and Military Discounts

While discounts should generally be universal regardless of age or background, sometimes it’s appropriate to accommodate seniors and military more than most, due to inaccessibility and sheer respect. In addition to providing positive PR in making the business appear as respectful toward seniors and veterans, offering these kinds of discounts can capture a demographic that is more accustomed to brick-and-mortar stores. It will also generate potential word-of-mouth buzz.

Often considering how revered the elderly are in family circumstances, seniors’ praise of a particular business would be unlikely to go unnoticed in their circles of family and friends. Research that suggests seniors show more customer loyalty to businesses than other generations is another thing to consider.

Offering discounts has a multitude of benefits, primarily in increasing reach, more easily attaining sales targets, encouraging customer loyalty and effectively reaching out to niches like the senior citizen community. It’s a practice that’s well worth looking into for all businesses.

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Tags: discounts, small biz

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