Stop the cycle of consignment discounting
August 7, 2019
Are you on the roller coaster of consignment discounting?
Conventional wisdom says discounting merchandise brings in more sales. Discounting is never a long-term strategy. If you want to attract shoppers for the short term, offer discounts. These customers will leave you sooner rather than later when they’re off to find the next, best deal. To build a solid base of loyal customers, focus on creating value and setting your shop apart. Here are 3 alternatives to stop the cycle of discounting.
Build loyal customers by looking at what motivates them.
A Harvard Business School study determined that people are motivated by 4 different biological drives. Here are the first 2:
- The first is the Drive to Acquire (many discounting programs feed this desire). These are customers looking for either status or the ability to just buy stuff. They want to own as much as possible.
- The second is the Drive to Defend (loyalty programs encourage this). These customers feel the need to earn rewards points to maintain a special status. They want to be part of a club. SimpleConsign has an excellent rewards point system
Most shops normally focus (without realizing it) on the first 2 drives to gain new customers and make sales. What if instead, you focused on the last 2 drives:
- The Drive to Bond is a clear motivator particularly for women. Your shop can build relationships and a sense of belonging. Create a special group, celebrate milestones or ask customers for feedback. The goal is to make them feel a part of your business.
- Finally, the Drive to Create is especially important for the younger Millennial shoppers. Use classes and events as a way to build these loyal customers.
Add value rather than consignment discounting
Discounting tends to erode the consumer’s view of your brand value. In other words, if you discount often, you are only viewed as the cheapest place to shop. Instead, charge full price and add an item or service as a bonus. Read 3 sure-fire consignment cross-selling and upselling tips. For a short time, offer a free gift with the purchase of an item. Add free delivery on furniture buys or partner with another business such as a hair salon and offer a special discount. In the mind of the shopper they are getting greater value even when paying full price. Make sure you put a time limit on the offer so that it creates a sense of urgency too.
Contact loyal customers with specific messages
Today’s consumer is bombarded by messages. If your marketing efforts aren’t segmented to target groups of shoppers, your message will be ignored. Get a better understanding of your key customers by using an online survey (such as SurveyMonkey’s free survey), a printed survey that you use as a bag-stuffer or even your Facebook Insights page to gain in-depth information about your shoppers and fans. Target specific shoppers with specific messages about specific merchandise they want and you’ll not only have a greater chance of making a sale, but you will be building relationship at the same time.
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