Alternatives To Discounting: How NOT To Lower Your Price This Holiday Season
Monday, December 14, 2009
What’s the alternative?
I’m often asked, “What is the alternative to discounting?” I think the more important question is, “How can I create more value?” By creating more value for your prospects, and ultimately your customers, price becomes less significant. For example, let’s take store A. Store A is offering a 20% discount on a towel set. These towels are available at just about any kitchen or bath store and even the big box retailers. Store B decides they want to move quantities of the towel set as well. But instead of discounting, they bring in an interior decorator to give a free “color match” seminar titled, “How to choose the right towels that make your home look like an expensive spa retreat!”
Assuming that Store A and Store B spend the same on advertising to promote their offers, store B will likely attract a similar quantity of prospects and may even have a higher percentage of sales. Regardless, they are building a pattern of value versus a pattern of consistent discounting. The endless loop of discounting is just that, endless – reducing margins and increasing prices. Very few retailers or online service providers can sustain the discounting tactic.
Think of ways to provide value to your audience. Yes, some people are solely motivated by a discount, but these aren’t the types of customers you truly want. Customers who see the value in what you’re offering and are willing to buy without added motivation become loyal repeat purchasers and advocates for your product, service, or store. Get creative, experiment with new and different ways to create value for your customers. The result will be long term customers who help you grow your business.
Marketing Blog founder and top-selling author Michael Fleischner has been featured on The TODAY Show, ABC World News, and Bloomerg Radio. 
3 comments :
I believe that your advice here is spot on! Instead of always trying to be the cheapest ~ we should look to become the best or the company which provides things which have the greatest value.
In addition to value, I would think 'experience' is also important. We should really examine the 'experience' that people have when someone enters our establishment. A perfect example for me is the 'Cheesecake Factory'. You're willing to pay more for the experience that you receive.
Those two things ~ value and experience ~ should guarantee you a profit!
GP
Service. Good, quality, customer service. There are customer/clients who will pay more because the service alone is better.
There is a grocery store chain in my area that has continued to rival the major national chains that discount and have lower prices. The reason is because when you shop in their store you feel welcome. The staff in every aisle greets you and ask if they can help you find something. They will take you to a product and not just tell where it is. The cashiers actually look at you and talk to you while scanning your groceries. It's worth paying a little more to feel appreciated and respected as a customer.
I have found that giving great customer service provides that extra value.
Nice post and nicely discussed about the impotance of a loyal customers and it behaviour regarding having discounts. Many Wholesale Trade Portals (dailytrader.com) are giving discounts to people to make them a regular and profit making customers.
Much appreciative.
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