Moving away from Price Discounting: why Money Can’t Buy You Love

Discounting is addictive for a reason… it’s such a highly effective lever to pull when you need to clear stock or meet a sales target that sometimes its irresistible. While it works its socks off at the beginning there’s a diminishing return with year round discounting as you reduce both your own profitability and the perceived value of your offering.

Somehow in the crazy world of the internet and social media it’s even more tempting to reach out to your database with best-ever-offers, crazy deals and one day specials but it really is a short term solution. Frequent deep price discounting doesn’t just eat into margin, it trains people to buy on promotion, devalues your brand amongst customers who would likely have paid full price, reduces the likelihood of customers paying full price in the future and can undermine your brand positioning. Ouch.

So how can you build customer loyalty, drive sales and remain competitive without becoming addicted to discounting? What if you stopped buying customers with discounts & sales, and started winning them over with a little love…

  1. Build & Nurture loyalties by making customers feel special – and I mean really special. Go the extra mile with a personalised offering, sneak peaks, special access, or include free sample sizes of new products as an unexpected bonus. Think beyond gift wrapping and free delivery to create a connection with customers and make your brand experience memorable… include a card with a personalised message linked to their purchase; if your customers are Mums turn a change room into a themed colouring-in corner so they can try clothes on in peace while the kids are safe and happy; if you’re a sandwich shop include a card with great local parks & quiet spots to eat lunch or fun things to do in your lunch hour; if you’re a physiotherapist give clients a branded yoga mat to do their exercises on. If you’re a service provider consider mini experiences or express packages to fit into busy schedules and give people a reason to keep coming back.
  2. Reward loyalty: One of the best ways to appeal to lapsed consumers is to remind them why they loved you in the first place. “Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one” according to Amy Gallo, of the Harvard Business Review. Finding strategies to retain existing clients and keep them coming back without heavy discounting will grow your client base and build your business. Proven ways to encourage customers to trade-up include ‘get your 5th free’, or offering bonus gifts or complimentary product or service when they commit to a longer term offer or bigger sale. Reward returning clients with extra special service or money can’t buy experiences – instead of a test drive offer car shoppers the keys for the weekend, invite customers to create their own experience, name a new product, design a shopping bag or design a soundtrack to their experience. Instead of reaching out to your customers with endless email offers or Google remarketing ads, partner with a complimentary businesses to add value – a personal trainer with referral to a physiotherapist or pilates. Think about how major retailers keep people coming back with collectibles, a rotating seasonal line or limited edition offer and how that could work for your business.
  3. Turn those loyal customers into brand advocates. Loyal customers (and staff) are more likely to recommend you to others and give people a reason to get in touch. Ask happy customers for recommendations for use on your website, social media and advertising material. Whether you reward recommendations with public appreciation, a private thank you note, benefit, or even a donation to charity, every positive recommendation builds your reputation and reminds the reviewer why they liked your business in the first place. Further leverage these relationships by incentivising clients to ‘invite a friend’ or give them a bonus offer to share. You can also build and reward loyalty by supporting a community associations, a charity which is linked to your product offer or benefit or close to your consumer’s hearts – you don’t have to replicate McHappy Day, but partnering with a local sporting club or little known cause can do wonders.

The best way to successfully move away from discounting is by finding other ways to add value, connect with clients and keep them coming back. Instead of gradually devaluing your own business through escalating discounts, developing a strategy which builds your brand proposition, connects with customers and expands your client base, will drive short term sales and build a stronger business for the long term. There’s no better outcome than that!


For practical, cost effective & proven strategies designed to build your brand and drive profitable sales without discounting, call Sarah from BlueFish on 0413 486 833 today!

Author: Sarah Ford
BlueFish Director & Marketing Specialist, Sarah Ford, has over 23 years' experience in brand management – 10 of those at Marketing Manager and Director levels and a further eight years in Retail Management. Passionate about marketing, Sarah understands the complexities of the consumer landscape and is known for her ability to create practical, cost-effective plans, which stand-out with consumers and meet business objectives. Sarah established BlueFish Marketing in 2009 and continues to provide marketing support on a campaign or project basis. Recent clients include JBS Foods, FreeTV Australia, Unilever, Paradigm Foods, MFA, Connecting Finance, Jurlique Int, Moving Mannequins, SCAD Research Inc, Little Chomps, Mummymetime and many more.