Four States Small Business Blog

Why Your Discount Isn't Going to Drive Results

Posted by Brice Chavez on November 30, 2017 at 8:00 AM

marketing bridgeDiscounts, special promotions, and sales are often a big draw to customers — in fact, two of the top motivating factors for how American consumers choose where to shop are price (81%) and the availability of discounts (71%). But is that what actually drives results? Is that all that keeps customers coming back? In today’s post, we’ll take a look at what drives consistent results, as well as when you should actually be using discounts.

What Actually Drives Results?

What drives lasting results is the heart and soul of your business — the customer experience. A recent correlation analysis from Forrester showed that businesses that lead in terms of customer experience grow their business revenue 14% faster than those that are laggards. Improving the quality of customer experience by just one point on Forrester’s index equated to revenue potentials between $5 million (credit card providers) and $873 million (mass market automotive manufacturers) based on the company’s total number of customers. If you think that just because they’re major companies with huge audience bases, you’re missing the lesson here — even big companies perform better when they focus on customer experience.

What does this look like for a business that wants to improve their Joplin marketing strategy? Focus on your promises first, and your products and services second. Discounts can be addressed as a tool of your advertising strategy. As we’ve discussed before, your promise is the element that provides emotional attachment between the customer and your business. What do you provide them, and why is that valuable? What does it mean to them, and what are they going to remember about your business afterward?

Why Use Discounts or Promotions?

Discounts can drive traffic, but it’s reliant on the quality of service and the value a brand provides. You can see this in the fact that 62% of loyal customers watch for deals they can take advantage of for their favorite brands, and 42% look for targeted offers from their favorite stores. In other cases, you may be able to attract new customers, like the 54% of fathers that go to a store offering better deals than their preferred store. But the question then becomes, what brings them back? If all you’re relying on is the discounts, you’re likely to experience more churn than you should be.

Because 8 in 10 customers are willing to pay more for a better experience, you should use discounts in a directed way. There are two reasons for this. First, thanks to different discount and couponing services (e.g., Groupon, Living Social, RetailMeNot), customers are used to saving lots of money, and you may need to offer a serious discount to get traction. Second, you don’t want to train customers to only wait for your special offers before they’ll shop. As a tool, they can drive traffic and increase loyalty, but discounts should never be your primary tactic.


Always Ensure the Service and Experience Match Your Message!

A consistent message that aligns with the experience your business provides is essential. You don’t want to talk about your business generically. For one thing, your business won’t stand out, and for another, it implies your business is generic. Your message needs to talk about the real quality and satisfaction that your business provides. But you can’t talk up an experience your business can’t actually provide either; you’ll severely harm the customer’s ability to trust you. It helps to remember our Marketing Bridge when you develop your message and creative: the quality and reputation of your business have to be developed first to support your advertising.

As you’re looking to put together your next Joplin advertising campaign, remember that discounts, like sales and other promotions, are a tool that should be applied carefully and strategically to drive traffic. Discounts aren’t what will keep customers back — that’s the realm of truly excellent experiences and the value you provide through your products, services, and staff.

3 Step Formula for Small Business Marketing Success

Topics: Marketing Strategy, Marketing ROI

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