We are all familiar with the old saying ‘Live by the Sword, Die by the Sword’.
Well the same could be said for Discounting in your business? Like most things in life & business there is always another side to every point of view.
No-one disputes that if you make your business survival about across the board discounting and high volume selling, then you are killing your margin, you need to massively increase your sales to maintain your net profit.
Pricing as the basis for competing is effectively a race to the bottom, and that is certainly not a race you want to win – Right?
So when is discounting a sound and beneficial strategy?
Upselling & Cross Selling – Puts dollars in your pocket.
- When you are using the discount to upsell or cross sell other features, products or services, where you are using part of the additional profit you are making to pay for the discount you are offering?
- Using part of a profit you never had to simply create extra money in your business. The easiest sale you will ever make is to the customers who are buying or ready to Buy Right NOW.
- Clearing stock is an obvious advantage. If you are not moving and it is taking up space, get rid of it at a discount, clear the space and do something constructive with the cash you generate.
- Acquiring new customers by giving them an incentive to give you a go, and reducing the risk for them to do it.
- Driving sales during slow periods. Sticking with the foodie example, if you know that Tuesday lunch is a slow period, you are open anyway, then you can advertise specific specials to drive traffic and then add-on sales once in store.
One of the best ideas I have come across in marketing is the concept of send the bill to your herd…
Meaning build the cost of your promotion in to the profit you make from the increased sales, rather than paying upfront.
This is the power of our marketing platform and systems.