Implement Discounting Without Sacrificing Your Brand

by Grace Miller |

Implement Discounting Without Sacrificing Your Brand


Discounting can be a valuable tactic to increase sales, however, some brands are worried about implementing discounts for fear that it may erode value and create perception of poor quality. When used strategically, discounting can increase sales and loyalty without causing negative brand perceptions. There are a number of ways to implement a smart discounting strategy while maintaining brand perception and drawing new customers, but it is useful to understand the root of some of the risks that come with discounting.

Some people are quick to point out the downsides of discounting, for example, if you had to lower product quality to maintain profit margins, that could potentially damage reputation, or if you maintained quality at the expense of profit margins, you could see competitors seemingly doing better. Businesses that offer discounts frequently manage to thrive; the trick is knowing how to leverage discounts as incentives for new customers who are on the fence about purchasing a product.

Solution: Target New Customers Intelligently

For manufacturers, retailers, and eCommerce companies alike, maintaining brand integrity is vital, so when offering discounts, you want to be able to target new customers without diluting brand value. Fortunately, there are tools available that include decision engines that target online “window shoppers” with discounts while excluding existing customers and those likely to make a purchase in the absence of a discount. Luxury cosmetics brand, Lancôme, used this technique and monitored analytics to detect patterns in website visitors’ buying habits. They not only successfully targeted discounts, but also learned valuable information they could leverage in future offers, such as which browser shoppers used most.

Put A Unique Twist on Discounting With Social Commerce

When you’re developing a discounting strategy, it’s important to try to be creative with it. Discounting helps attract new customers, turn on-the-fence shoppers into paying customers, and keep your current ones coming back. A unique and creative way to take your discounting to the next level is incorporating social commerce into your discounting strategy to maximize effect and drive even more sales. With social commerce, you can leverage the power and reach of social media and utilize discounts to give your customers incentives to engage with your brand This can be done by encouraging new customers to engage in contests or share and save campaigns, and reward your current loyal customers to refer their friends or share their recent purchases right after they make them. Social commerce gives you the power to entice new and current customers and keep them engaged with your brand and products.

Methods for Discounting Without Diluting Brand

When brands offer discounts, it’s crucial to ensure your strategy is well planned and calculated. Stephen Wunker of the consulting firm, New Markets Advisors, advises a five-step approach to intelligent discounting:

  1. Offer discounted products separately from the core brand if possible
  2. Target a different customer type with your discounting, such as targeting a younger demographic
  3.  Emphasize tiers of value with core and discount brands
  4. Use different sales channels for different value tiers, market core, and discounted products
  5. Publicize timely positive influencer reviews of the discounted products

With social media marketing and analytics enabling brands to target more selective offers and understand price elasticity limits, broad blanket discounts are becoming less necessary. Other tactics, like free trials, may reduce perceived value of a product, but not as much as discounts do, so discounts should be only one of many techniques in your repertoire.

Testing Your Discount Strategy Is Essential

Since there is no single discount strategy that works for one brand, it is important to test and monitor your strategy based on several factors, such as seasonal demand, stacked promotions, and demand within certain niches. This can be done by incorporating A/B testing to see which campaign and strategy works best for you and your audience. For a brand, it is important to find the right balance between generating sales and maintaining profitability while maintaining your brand image. Discounting can be done without harming brand image as long as you strategically plan and execute to make it work.

Using a dashboard or analytics tool is crucial to help ensure you are receiving optimal results and achieving your return on investment and revenue goals. Having a dashboard, such as Annex Cloud’s comprehensive Social Commerce dashboard gives brands valuable customer demographic and social graph data so they can see how well their discounting strategies are doing. For example, if you implement a Share and Save campaign, Annex Cloud’s dashboard will give you clear and extensive knowledge on how much your sales and revenue increased despite the discount.

While discounting shouldn’t be done simply to drive sales, it should be an element within your overall marketing strategy. Brands need to look at their discount strategy in the long term and weigh the risks and benefits. When you implement discounting, ensure you are closely monitoring results to gain better insights on maintaining profitability without diminishing your brand’s image. When discounting is used with precision and monitored closely, it can be a valuable technique for gaining new customers and developing their loyalty.

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