When Discounts Don’t Work
27th October in Marketing, Strategy
We’re a month out from Black Friday (or should that be Black November?), and most businesses will already have their discounts ready for retail’s biggest sales holiday. From your promotion details to your creatives, it’s crucial that you have your plans in place with plenty of time to spare.
There are times, however, when discounts aren’t the right option for you and your brand. Whether you’re concerned about brand perception, or are trying to avoid a race to the bottom with your competitors, Black Friday can prove difficult waters for a brand to safely navigate.
How can you still make the most of this period, which last year saw British shoppers spending over £8.57 billion? Below, we’ll explore some of the reasons that discounting your products might not be the most effective strategy for you this Cyber Weekend before looking at a couple of alternatives.
Race to the Bottom
The simplest downside to discounting your products is that it can start a race to the bottom with your competitors that benefits no-one. With a sales holiday like Black Friday (or Singles’ Day in China), we know that consumers will be shopping around for the best deal; often meaning they’re willing to wait around for the right price to appear.
To pick up sales during the weekend, you need to offer the best deal compared to your competitors – but this often means slashing your profit margins and losing out overall. For some businesses, this won’t be a risk that they can take.
Cheapening Your Product – and Not in the Good Way
While consumers are always looking for a great deal over Cyber Weekend, there are some products and verticals where cheaper products don’t always mean better. Questions might arise about the security of an internal camera if they’re suddenly £50 cheaper. There are some items where consumers are willing to splash out: particularly when it comes to peace of mind.
Discounting can cheapen your product and your brand in the eyes of your customer, as it tells them that it’s not worth the original price point. Why would they shell out for your latest release when they could wait for the next time you have a sale and get the same thing for 50% off? Ensuring that your product, and indeed your brand, maintain their value is more important than wins over an annual sales period.
What To Do Instead
So, if you aren’t going to discount your products, what can you do instead to make the most of the biggest retail holiday of the year?
One option is to create bundles or starter kits that bring together a couple of your products at a lower price point. This might mean a kit of your starting product and 2 or 3 extras with a price tag that makes it easier to try out your brand. Another common bundle brings together some of your bestsellers. This is a great option for some of your newer customers who only own the base product, for example, to dive into the rest of your line.
Technically speaking, this is more about how you communicate your discounts, rather than the actual discount itself – you’re still reducing the price of your products, but in a way which communicates value overall. Instead of 50% off, consumers are able to get X and Y for the price of X alone, for example, and it’s this framing that can make all the difference.
Alternatively, you might add a 6 month subscription to your membership platform or subscription service along with the product. In doing this, you’re adding value to the initial purchase rather than discounting outright. The customer will recoup the costs elsewhere, but it’s a nice touch to maintain brand security while still being able to offer something extra over Cyber Weekend.
Finally, you can take a leaf out of the small business handbook and offer freebies at purchase. One of the reasons consumers love shopping with small businesses is the impeccable experience you get on delivery: from beautiful packaging to the free gifts they added to your order to say thanks. You’ll more than likely have your packaging down pat, but free gifts are not only a great alternative to discounts, but can also greatly improve your customer experience.