Are you on the roller coaster of 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 focusing on 2 of the 4-Drives
A Harvard Business School study determined that people are motivated by 4 different biological drives. 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. The second is the Drive to Defend (loyalty programs can feed this). These customers feel the need to earn rewards points in order to maintain a privileged status. 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 by asking for feedback or participation in a special group. 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 discount
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. 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.