Is Discounting A Good Strategy For Small Ecommerce Websites?

In an effort to get attention, some businesses will offer a discount.

25% Off!

You’ve seen these sales before. They do get attention sometimes. They look pretty good in ad copy. And they often boost short-term sales numbers.

That’s the other reason companies do it. Either to boost product numbers or to push through difficult periods such as recessions.

That all seems fine.

But there are a few key points to understand…

No Going Back

The moment your marketing message of XX% Off hits the world, there is no going back. It’s out there. Even if you’re able to keep it off social media and coupon websites and Google search history and Wayback Machine, people still remember.

The moment you offer a discount people start thinking that they can wait until you offer the same discount again. It can throw the demand off for your product. It can actually deter attention from your products to the discount itself as a secondary driver of demand.

New Kind Of Customer

In 2008 and 2009, many companies starting offering discounts. It seemed that as soon as one did it, then two more did it. Then 10 and then seemingly every company did it just as a way to stay relevant in the short-term.

Then the recession subsided and companies started wanting to go back. This was painful for some. Others just accepted their new position and started targeting a different kind of customer.

A customer that focuses on discounts. Obviously this customer still focuses on products. Those are what we ultimately buy. But some seek the discount more than others. They feel good about the discount even if the product is a little lesser of a product.

This customer isn’t right or wrong. They just have different demands.

And if you’re going down this route you have to be aware of who your real customer is and market to them in the way that will work.

Resentment

Discounting can lead to a lot of confusion for customers. And from that confusion there can be resentment. Resentment of other customers, but eventually of the brand.

A common discount is something like 20% Off Your First Purchase.

Imagine being a long-time customer of this company. You see this marketing message. Perhaps by mistake. Now you’re thinking…

Hey, I’ve purchased from this company multiple times. I’m the one that deserves the discount…

And that would make sense. But new customers are seemingly more important to the brand because a first purchase is often more difficult to make than a subsequent purchase.

With discounting, you have this type of issue.

Conclusion

Discounting may not be all bad. But if you’re going down this route you have to consider what it means. You can do it and do it successfully. Many brands have done so for the long-term. But consider all that it means. It’s more than just a quick way to boost sales.

Dayne Shuda

Dayne Shuda

Owner of Ghost Blog Writers.

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