B2C Marketing, Consumer Promotions and Rewards
Spending money might be a part of life, but that doesn’t mean your consumers enjoy doing it.
In fact, we’ve talked to countless consumer psychologists who’ve said that some consumers actually experience a sense of pain when purchasing products (even if they love them.)
To help ease this pain, many brands offer discounts in hopes that the drop in prices will increase the product’s perceived value. This isn’t the sort of strategy to take lightly. Brands have to be smart if they want to make a profit.
Renne Michelin, Virtual CFO at 2account, an accounting solutions provider, offered expert advice on what you can do to create a smart discount strategy.
The benefits of discounts
Broadly speaking, B2C marketing is focused on immediately servicing the needs of customers. The strategies you set forth are designed to not only offer value through products and services, but should evoke emotional pleasure as well. And strategic discounts are a great way to keep your audience engaged and attract new customers.
Discounts contain a number of psychological benefits that make them attractive to customers: one, they won’t be around for long. If your customers want to get a perceived steal on a product that is usually sold for more, they’ll have to move urgently or miss out on the deal. Two, if customers decide to cash in on the discount, they’ll feel as though they’re part of an exclusive few who spent less money, thus making them value and appreciate the interaction even more.
These promotions can also do great things for your brand. Even though it may seem counterintuitive that a business can make a profit from discounted items, the reality is that your brand benefits from it, too.
“The sense of urgency and fear of missing out created by a sale means that you increase your sales volume. That’s the real reason we run short-term B2C promotions: Because the profit can often be greater than when not running the sale,” Michelin said.
How to create a smart discount strategy
Michelin says the most important thing to consider when creating consumer discounts is that your brand must have a balanced approach to sales. That means strategic promotions — as opposed to endless deals — that minimize financial risk for the company and keep users engaged.
One critical way you can go about picking what items to sell for discounted prices is by considering the following six categories:
1. Time of the year
You may not be able to control the weather, but you can take advantage of it. Seasonal weather and holidays offer your brand multiple opportunities to prompt urgency in consumers. You can offer discounts on seasonal items after the seasons change. You can also lower item prices while they're in-season to gain more traffic during that period.
2. Aging stock
Not every product is going to be a hit right away, but that’s okay. You can entice your customers to take a second look at your items by lowering the cost. Dropping the price on products that sit in the warehouse either due to a lack of interest or an overestimation in supply can help get those items in the right hands.
3. Best sellers
While all of your products are meant to make your customers happy, some of them always seem to make your customers smile. Your best sellers are likely already driving a profit, but adding an occasional discount has the potential to really send your sales through the roof.
4. Abandoned carts
Consumers get distracted. Simply liking a product isn’t enough to make them purchase, but a reminder notification with an added reward for their patronage might just do the trick. Give your consumers a discount on the items in their cart to encourage them to complete the purchase.
5. New products
Early-bird discounts on new products can help drive buzz around upcoming launches. You can keep the anticipation high by limiting the discount’s time span, therefore capping the amount of people who can experience the product before anyone else.
6. Competitive discounts
There are tons of products on the market that promise to do similar things, but it's having a competitive edge that helps some brands stand out from the crowd. Discounts are one strategy that can make your products appeal to consumers. Take a look at your competitors’ items and price your items a little lower for a short time to bring in new customers.
Creating a smart discount strategy for your brand is all about knowing your audience and what will be best for them and you. Simply put, the goal is to curate an overall enjoyable experience.
