Now that you’ve thought about your brand as a promise, learned about the analytics you should be monitoring for success, and started to think about nuanced discounts, it’s time to think about how you deliver value to your consumer through price and quality.
Here are three frameworks to keep in mind as you develop your deal strategy.
1. Quality Is Key.
Making the most of brand-boosting deals requires a certain level of circumspection. Deal redemption rates are, overall, in decline because many brands overwhelm consumers with shiny sales. In order for discounts to propel you towards your customer acquisition goals, it’s important to think of them as just one tool in your marketing toolkit.
Sales and discounts are highly effective if you target groups of consumers who will see the deal as a sign of your brand’s loyalty to them. Discounting a customer favorite — a product whose quality has been proven and trusted — is a great way to reward your consumers and increase your brand equity.
Be especially critical of coupons when introducing a new project. Remember that the quality of a new product has yet to be confirmed by consumers, and when the price goes up to full price after initial couponing, it’s questionable whether or not they will continue to buy.
The lesson here is clear: Work to establish your brand’s quality factor as quickly and solidly as possible. Once you’ve achieved that, you can inch prices upwards significantly without losing sales thanks to that solid quality piece of the value equation.
2. Deep Discounts Are Dangerous.
Deep discounting can be especially damaging to your brand. First off, when you offer a deep discount, you need to be aware that it could trigger an avalanche of demand for which you are ill-prepared to handle. This is what happened to so many Groupon deals – the retailers couldn’t handle the demand and then suddenly are stuck with lots of bad reviews that send their brand equity right down the drain.
Studies have also shown that really deep discounts do make consumers wonder if there must be something wrong with the product. The fact that 50% off has become the new normal in the minds of many consumers is unfortunate for everyone. Grit your teeth and get out of the deep discount game for good – the long-term brand damage done far outweighs the short-term bump in sales.
3. Discounts Are An Experience.
The second piece of this strategy puzzle means you can use discounting when you need to, but it should be in conjunction with boosting some element of the product’s quality in order to maintain value in the face of a falling price. Think about what quality elements can be boosted fairly easily – perhaps data-driven deals that surprise and delight your customer, new packaging, or special publicity events that enhance your product and brand’s image.
By using these simple but smart strategies when crafting your deals, you’ll enjoy the benefits of hitting your targets while continuing to build brand equity and delivering value to your customers.