How to effectively use discounts and vouchers, without cheapening your brand
As a business owner or marketing exec, to gain new business and retain loyal customers, we often need to ‘persuade’ them. We need to make them ‘want’ to buy our product or service, either because it is amazing and they simply must have it, or because they feel the value of it is much higher than the physical cost.
Advertising, in it’s many forms, is the lifeblood of any business. Unless you sell eternal youth in a bottle, I would hazard a guess and say you would welcome more paying customers. Advertising is how you get them. Now, there are 2 major types of advert – brand awareness and discount.
“If I run a promotion using discounts and vouchers, my existing customers will switch to the offer, so I lose money”
The issue here is not the medium, it is the offer. If you are discounting a product or service that is already selling well and has a good following from your loyal customers, then you clearly do not need the use of discounts and vouchers. If you are looking to attract new customers and turn them into loyal customers, the ideal offer for this would be a loyalty system, for a limited time. If it’s a service you offer, perhaps consider the amount of times in a week, month or a year that your loyal customers use it and then create a loyalty system that gives them a free service when they have already bought/used their regular amount. By doing so, your loyal customers will feel rewarded. You will also push less frequent customers into using your services more often and also engage with new customers and make them come back more than once.
See the bigger picture
Consider the benefits of a cross-selling promotion, i.e. ‘10% off food at any of our events/locations’. This would be aimed at people who have already paid to enter and use your services, so wouldn’t necessarily attract new custom. What it can do is increase the spend of your existing customers. If they had no intention of eating at your event, but were offered 10% off, they may well consider it.
Combat the quiet
Use discounts and vouchers to combat your quiet periods or to create awareness of a new late opening. Many businesses, particularly retailers, have quiet days. Let’s take hairdressers as an example. They tend to close on these quiet days and have the day off. They do this so they can work on a weekend, when there is naturally more customers. In this scenario, there’s a clear indication that 9-5 midweek sales will suffer due to the bulk of people generally being at work. However, not everyone works and people do have days off work too. Experiment with this. If Tuesday morning is your quietest period of the week, offer 25% off in the morning only and compare your takings with the previous weeks. Granted, you will always have that 1 regular customer who has picked up on the deal, so you may lose a few pounds for that session, however you may also gain a few more appointments, which fill the times you otherwise wouldn’t have been busy. This is a win!
Use an offer to create a stronger brand
Use discounts and vouchers to encourage people to book earlier. i.e. children’s party at a soft play centre. Look at your bookings for the year and compare them with previous years. Were there any periods that weren’t fully booked up or perhaps described as quiet? How much time in advance are bookings made? A few weeks? A few months? Consider offering a discount if a customer books a party 6 months in advance. You may think this sounds like a long time and perhaps it is. However, you can steer people to book parties that will take place in your quiet periods and also by booking well in advance, you are helping to boost your cash flow in terms of deposits taken and future revenue. Also, by creating a series of very early bookings, you may well end up creating more demand later down the line, similar to the way a top restaurant does. For example, you hear there’s a long waiting list to get into that swanky restaurant in the town centre. Because of this, you assume it is amazing, which means that particular brand is very desirable and strong. Still, regardless of the length of time, you book anyway, because it will be worth it.
“When I offer discounts and vouchers, it only attracts one off customers who don’t return after they’ve bought the cheap product/service”
This isn’t necessarily a bad thing. As long as you are making money still, they are a customer you wouldn’t have otherwise had. Also, you can’t be 100% sure none of those customers will return. It’s a great way of enabling people to try out your product or service. I’m sure your product/service is great, but not everyone can regularly afford it. You should consider that they may speak to their friends about it after they have used it. With them paying less for it, they will subconsciously feel they got a great deal and generally were very happy with what they received. When people are happy, they have no issues in making recommendations to friends and family. Chances are, many of your existing loyal customers came from recommendations, just like these!
Discounts and Vouchers do work!
No matter what sort of business you run, there are lots of ways you can use discounts and vouchers without damaging your brand or your profits. You simply just need to focus on your weakness, then turn it into a strength, with the use of a little discounted persuasion!