Many businesses opt for a discounting strategy on their products to gain more sales. However, this is not the best solution for small or local business owners. Their profit margin is significantly compromised. Moreover, even if you opt for discounts, it is not a long-term solution for your business.
Reasons why discounting is bad for your store:
Not offering discounts in future will hamper sales
Offering discounts on your products might seem like a good option now, but it is only short-term. Your business will definitely get more exposure and simultaneously more customers. However, if you decide to stop giving discounts in future, customers will be reluctant to pay more. They will think that why should they pay more? This is because you had offered discounts before, thus lowering your business value.
More discounts imply less brand value
When you offer discounts on numerous products, it portrays that you have no faith in your product. This is why you are lowering their price in order to garner more sales. This implies that your products are not worth the full cost, thus reducing your brand value.
Profit margin collapses
When you sell products at a discount, you lose out on a significant portion of your profit margin. Thus, you have to entirely depend on future opportunities. This creates the pressure of making greater sales and closing more deals in order to compensate for the loss.
In this case, people always ask, "Do you wish to boost your sales or profit? ". What if we want both? Do not worry because we have come up with alternatives to boost your sales without compromising your product price. Read this article to know further.
6 tips to attract customers without offering a discount:
Lower price alternatives
What do customers do when they see several identical goods listed at the same price? They generally bail out on buying or even consideration because there is no difference. Thus, make sure to offer similar products which cost less but are nevertheless of good quality. When customers see cheaper products right beside the expensive ones, the cheaper priced product seems very insignificant or reasonable. Thus, you can sell more of the lower-priced items. Moreover, it does not imply that you cannot sell the expensive product as many customers believe that more cost implies added benefits and features, so they opt for it.
Upsell with attractive deals
Upselling implies manipulating the customer into spending more money than they had initially intended to. So how to do that? Let's take an example of a customer planning to buy a film camera. During checkout, you can list some essential add-ons that go with the product they are purchasing. In this case, you could offer a deal such as buying the film camera with a film packet, and a camera bag would land them with a 20 per cent discount on the whole amount. Alternatively, you could also offer them the option of gift wrapping by paying just a few bucks extra.
Make sure to upsell the products that have higher margins.
Customer-friendly Payment schemes
People are willing to buy something more if they have a chance of paying the price in instalments. For small businesses, there is nothing worse than a consumer who likes the goods but bails out during checkout due to the one-time full payment policy. Thus, you need to have a flexible pay over time option for the customer's convenience.
There are many advantages of doing so. Customers will be at ease since their financial expenditure will be balanced. Moreover, this also reduces the risk of impulsive buying and returning, which has more chances of happening in a one-time payment scheme. Thus, there will no abandoned carts anymore!
Building customer relation
One of the primary ways of building customer loyalty is by proper and transparent communication with them. It includes responding to their queries, guiding them throughout the shopping, taking their feedback and working on them. Direct contact also enables good customer-store relationships since it shows that you care about them and their interests. You can build a rapport with them, and direct text-based communication helps establish a personal relationship beyond money and materialistic needs. This ensures a long term connection.
Opportunity to negotiate
Allow customers to negotiate on the whole amount during checkout once in a while. This enables both the customer and the seller to reach a common ground that will profit them. This projects that the seller is ready to mould their price for the sake of customer convenience. Besides finding a suitable price for both parties quickly, a buyer may also develop a degree of confidence and trust in the goods and the seller via this discussion.
Although the seller might be at a disadvantage here, they gain customer loyalty which is more important in the long run.
The free return policy makes the purchase process easy for customers and motivates them to buy. This ensures that if customers have any problems, they can simply return the item. This might increase the percentage of returns, but simultaneously customer loyalty also increases. Thus, the hassle-free return policy will not make them second guess their purchase.