Hello Friend,
Discounts are often seen as a way to raise quick funds for a business. Since the goods or services sell normally, discounting them and selling more will obviously lead to more profits... or so goes the thought. Yet, too often the thought does not actually follow the real math of the discounts. Another problem that many business owners face is that they often inadvertently train their customers and clients to expect a discount. Think about it, how often do you go to the "after holiday sales" to buy non-perishables? While shopping online, you might look at a sales page and then click home to see if they have a popup that will offer you a lower amount. Not only have you trained your customers; you may even be going against your brand model. This is part of why pricing is such a difficult task. The other difficult task is realizing and accepting that "having the lowest price" isn't always what drives sales. Be aware that your product, your business, reputation, your sales people, your service, the customer and other variables are mainly what drive sales. The risky strategy of undercutting everyone's prices rarely works out. And today, Michelle Chance-Sangthong covers how it can also be more expensive to offer a discount than to sell at the normal price. click here to find out how.
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Talk soon,
Lee Collins
Managing Director
StomperNet, LLC
"The bitterness of poor quality is remembered long after the sweetness of low price has faded from memory."
~ Aldo Gucci ~
Gucci
By Michelle Chance-Sangthon
We live in a time when we want and often need to stretch dollars further because everyone wants a deal. And who can blame them? When you sell retail goods, it's very easy to get in price wars, and truly those are often only a "race to the bottom". Listing the best price will get you more customers, but it may not bring you more profits.
Businesses are making PERMANENT DISCOUNTS a regular part of their "marketing", and not just a part of a sale or special offer. Most entrepreneurs reading this will never be able to compete on the scale of a big box retailer, yet they try to price themselves like one.
Last year at a family dinner we were discussing business changes, and my brother-in-law (naïvely) suggested that we could just lower our prices a bit too attract more sales. I agreed with him that a discount might encourage more customers, but...
Read More...
Discount Decisions
- Are your discounts permanent?
- You are pricing like a big box retailer and you likely aren't one
- Offering a 5% discount you'll need to sell 11% more to make equal profits of selling at no discount.
- At 20%, you'll have to process 133 more
- Don't Discount Yourself Out of Business!
Remember: Next StomperTip:
Thursday, March 29, 2012
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