Discount Strategies Used Today

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September 2, 2022 Marketing

Customers have always loved discounts, and they will continue to love discounts. It is a simple fact that most marketers and business owners agree with. As a marketer, offering lucrative discounts is one of the best ways to grab your target audience’s attention and increase the sale of your products and services.

As more and more people are shopping online, the importance of discounts has grown tenfold. According to research, almost 60% of U.S. customers say that discount is one of the most important factors for them while shopping online. So, it is quite natural for businesses to adopt different discount strategies to attract more customers and encourage them to make a buying decision.

This blog post will discuss the top five discount strategies used by present-day businesses to boost reach out to more customers and boost sales. Read on!

Top five discount strategies used today

There are countless ways to offer discounts to customers. However, the following five ways are known to generate the best results quicker than others. It is why almost every business – no matter its size or popularity – is using at least one of these strategies.

From Amazon to Walmart to a local bakery store, you will find all kinds of businesses inculcating these discount strategies or discount pricing in their marketing plan.

1. Loyalty discounts

Offering discounts to your most loyal customers is one of the most popular discount strategies. Companies offer these discounts to their most consistent and recurring customers.

The best way to offer loyalty discounts is through loyalty programs and clubs. Businesses can invite certain customers to join their loyalty programs where they will get exclusive deals, rewards, and special offers. Loyalty discounts aren’t meant for reaching out to more new customers. Instead, their main objective is to show appreciation to recurring customers, build brand loyalty, and boost customer retention.

A great example of loyalty rewards and offers is Amazon. This e-commerce giant offers special deals, free deliveries, and some other benefits to its Amazon Prime members. It is a subscription-based program where customers can enjoy special benefits by paying a small subscription fee.

2. Holiday-exclusive discounts

People shop a lot during specific holidays. They buy gifts, home decoration items, clothes, electronics, and whatnot! And so, holidays are the perfect times to roll out discounts too! However, since most businesses offer special discounts during Christmas, Thanksgiving, Easter, and other occasions, the competition is intense during these times.

Most businesses provide holiday discounts in the form of offers like “buy one, get one free” or 50% off” and so on. The purpose of such discounts is to simply boost sales during the festive season.

3. Early bird discounts

As the name suggests, early bird discounts are offered to the first few customers of a newly launched product or service. When a company launches a new product/service in the market, it naturally wants to grab as much attention as possible. And so to fight the existing competition and kick-off sales, most companies offer early bird discounts.

These discounts are offered in the form of pre-order discounts and limited-time offers. While any company can use early bird discounts, they are mainly used in the hospitality industry. Hotels, vacation rentals, flights, restaurants, spas, and more offer such limited period offers to boost initial ticket sales and pique customers’ interest.

4. Existing customer or referral discounts

Another extremely popular and effective modern-day discount strategy is referral discount. It is a form of incentive that is offered to existing customers every time they refer a new customer to the company. These discounts can be in the form of cashback, bonus points, or a certain percentage-based discount on their next purchase.

Referral marketing is extremely powerful. When satisfied customers tell about their experience to their acquaintances and refer the business to them, the said business can generate more sales and even get long-term customers. However, getting referrals isn’t easy. According to a report, almost 83% of happy customers are willing to refer the company to their friends. But only 29% of them do that in reality.

So, by offering referral discounts and rewards to existing customers, businesses give them a solid reason to tell about the products and services to their loved ones. In addition to this, some companies also offer discounts to both the referral and referrer. It is a fantastic way to generate organic traffic, boost word-of-mouth advertising, and increase brand awareness.

5. Free shipping discounts

Discounts don’t always need to be in the form of cashback in direct monetary terms. Modern-day companies are also offering other kinds of benefits in the form of discounts. Free shipping discounts is one of the most popular online discount strategy that generates excellent results.

Most customers don’t like paying shipping fees. And if they have a way to avoid it, they will happily take it. By offering free shipping, businesses encourage customers to make an online purchase immediately. It improves their shopping experience and reduces the price of their purchase.

Free shipping is also offered in various forms. Some companies keep minimum price criteria for offering free shipping. For example, they keep deals like “enjoy free shipping on all orders above $100.” It helps in two ways. First, it encourages customers to make a purchase, and second, sometimes customers buy an additional item to cross that price threshold and avoid shipping costs. It is a great way to generate more sales and stay competitive.

The bottom line

So these were the most effective and widely used discount strategies. While offering discounts is indeed a great way to attract more customers and increase sales, it doesn’t mean it should be used in every context.

Business owners must remember that using discounts just because everyone else is using them, isn’t the right strategy. You need to have a clear objective and a plan before introducing a discount on your products and services. Make sure to collect customer data, research the market, analyze your competitor’s performance, and then take a decision.

Remember, when you offer discounts at the right time, on the right products, and to the right people, they can do wonders and offer extraordinary results!