Why Discounts Are Effective
Discounts should be strategically implemented. They serve as a means to train individuals to acquire desired items at reduced costs.
Research indicates a preference among people for receiving 50% of the same product as a complimentary addition to a current purchase or obtaining a 25% discount on a product, despite being mathematically equivalent. Notably, the latter option proves even more advantageous as it presents two alternatives: purchasing one item at 75% of its original cost or acquiring two items for 150% of the previous cost of one.
It's worth mentioning that offering an additional 25% discount on top of an existing 20% discount appears more appealing to customers than a straightforward 40% discount, although the mathematical outcome remains the same.
Discounts are inherently relative.
Determining the duration of a discount is challenging, but based on experience, a longer discount period is recommended. A shorter duration may lead to losing customers who are deliberating or waiting for a sufficient budget. Incorporating a sense of urgency may not resonate with young consumers.
Carefully decide the duration of the discount period and effectively communicate this to potential customers.
For businesses with a significant base of loyal customers accustomed to frequent discounts, there's a risk that they may exclusively patronize your offerings while they are in effect. While they await new discount opportunities, they become loyal advocates. On the other side, some businesses refrain from offering discounts and wonder why their products lack interest and a fan base.
Businesses that have a substantial customer base accustomed to regular discounts get the potential advantage of exclusive patronage during the promotion period. These loyal customers, while anticipating new discount opportunities, transform into ardent advocates. Conversely, certain businesses abstain from providing discounts and are perplexed as to why their products struggle to garner interest and don't create loyal fans.
Discounts can serve as a means to re-engage with lapsed customers. Offering a small complimentary gift to previous clients can serve as a thoughtful gesture, evoking positive sentiments and prompting reciprocation.
Customers are drawn to discounts and appreciate personalized attention. Demonstrate genuine care, and your business will thrive irrespective of economic downturns or competitive activities.
