Some experts think offering discounts devalues a product and cheapens a brand. Others feel that discounts can ostracise certain audiences.
Discounts can set a precedent with customers who may begin to always expect a discount, or who will only shop/eat/drink with you when prices are lower. They can also make customers question your everyday charging and think you’re overcharging them in normal circumstances.
With all that to consider should you discount? And if so, how?
Market to three visits
According to Jon Taffer of Bar Rescue, “If somebody goes to a restaurant for the first time and has a flawless experience, the statistical likelihood of them doing a second visit is about 40%.
“The second time a customer comes and has a flawless experience, the statistical likelihood of a third visit is still about 42%. The third time they come, the statistical likelihood of a fourth visit is over 70%. You have to market to three visits, not one.”
His example scenario follows…
On their first visit, identify a new customer as a first-timer by – for example – placing a different coloured napkin next to them (if you usually set a table with white napkins, set them with red).
At the end of the meal, when they come to paying, ask them ‘did you enjoy your xx?’ When they answer yes, then say ‘well next time you’ve got to try the xx’ and write a £5 discount for that meal on the back of a business card.
When they use the written-on card the next time, you’ll immediately know they’re a second-time returning customer. At the end of that meal write them a voucher again for a free drink the next time they come.
The cards are stacked
By using written offers on the back of cards you make the customer feel special – this doesn’t look like an offer you give to everyone. Because you’re writing it out on a business card it seems spur of the moment.
For not much outlay you’re making sure your customers become loyal regulars who always have nice things to say about you.
You can also use your POS system or bookings system to identify repeat customers (through telephone numbers or email addresses when booked) and give them a ‘regulars’ discount on their bill or a free drink at the end of their meal.
And don’t just think the three visit rule applies to bricks and mortar establishments – it can be used online too (and can be much more easy to automate and apply). For example, the first time they shop with you, offer them something for when they visit again – a free gift or a 15% discount, second time around offer them free shipping or access to a VIP sale.
Target influence, not influencers
We’ve all seen the shiny new restaurant and the amazing new superfood that seems to have blanket social media coverage from bloggers, food critics, journos and lower-level celebs.
While targeting influencers is an important part of your initial public relations strategy, used long-term in can ostracize the public by making them think you only offer discounts and free stuff to the media. In terms of product placement, if consumers only see it in posts with #advert #ad #spon #sponsor and not in the hands of people who have come across it organically, then it speaks volumes about the quality of your product – you wouldn’t use it unless someone paid you to!
A way to circumvent this is to use social media direct messages (especially on Instagram and Twitter) to offer personalised discounting. To find the right people, start by, for example, searching #Manchester or #Smoothiebowl and seeing what’s being posted under those hashtags.
Click on any food posts coming up from the day you search and find people who aren’t bloggers, celebrities, journalists or media personalities – but who still have a pretty decent following (Instgram: circa 750 plus outside London, 1,500 plus within London. Twitter: circa 5,000 plus outside London, 10,000 plus within London).
Let’s say you find Jeni S, who’s posted a picture of a burger and writes ‘Loving #smoothiebowls in #Manchester’s Northern Quarter.’ Why not direct message Jeni and say ‘Hi Jeni, we love seeing pictures of our Northern Quarter neighbours. Next time you’re in the area, show this message and get a free superfood juice with your meal when you dine with us.’
Or, “Hi Jeni, what an amazing looking bowl. Did you know we make smoothie bowl freezer packs so you could make this at home? Here’s your own personalised discount code. You can even share it with your friends and followers if you like. Tag us in your make, we’d love to see what you come up with!”
By using personalised messaging, you’re offering a discount to someone directly. This doesn’t look like a discount you give to everyone and it’ll create some seriously positive feelings about your brand for that person.
The additional benefit of using social media to offer discounts, is that when the discount is redeemed the customer already knows your social media handles and is much more likely to share on their social media platforms.
Peer-to-peer sharing is much more trusted by the consumer than sharing by influencers and the media. Consumers are becoming wise to the use of influencers for brand amplification and know the media will have been given what they’re sharing for free (and may suspect they’re being paid too).
The Competition and Markets Authority now insists that all paid for influencer content is labelled as such and Universal McCann’s social media wave study paints a picture of declining trust in influencers declaring that only 4% of people trust what influencers say online.
Instead of providing discounts on your products, why not add something extra? This could be a free gift or free delivery if you spend over a certain amount, or an additional product at a discount – all offered automatically at online checkout. If you don’t want to, or don’t have additional products to give away, why not offer those who complete checkout an extra 10% off their next spend over a certain price point?
This way you’re not devaluing the product your customer already wants and you’re making them feel valued by giving them something extra. By adding a reason to visit your site or store again, you’re developing a loyal customer base who feel valued.
What better way to make someone feel valued than by recognising their loyalty? A simple loyalty card or online points system encourages consumers to come back time and again to claim their ‘free xx’.
Again, you’re not devaluing your brand or product, but developing repetitive buying behaviour and a feeling of positivity within your customer base.
This approach can also be used if a customer regularly buys in bulk. Send them a personalised email giving them a personal 10% discount on everything they buy over a certain volume. This works especially well if you’re also rewarded by your suppliers for buying in bulk and can help you plan your buying schedules.
Get it while it’s hot
If you attend events or shows why not offer time-based discounts that can only be redeemed there? A discount tied to an event doesn’t devalue the brand, it encourages people to buy on the spot as consumers are always afraid of missing out on a good deal.
It also entices new customers who may not be familiar with your brand or product, establishing your brand name in the mind of new customers when they leave.
Go Falafel, a personal favourite, operate a thank you scheme for images of their food which they re-post on their Instagram account. When they use and credit an image, they offer the tagged person a free drink the next time they pop in for food (that person needs to direct message them to claim their freebie).
This strategy works in a few different ways:
- It gets people to try parts of the menu that they wouldn’t usually (as people usually get a wrap, but not a drink).
- It drives footfall (and therefore sales) – when the customer redeems the drink they’re more than likely to do so when purchasing food at the same time.
- It increases positive sentiment with the person whose image was chosen and therefore increases the likelihood of positive peer-to-peer recommendations.
- It encourages their customer base to share images on their social accounts – a good way to amplify the brand.
So, while discounting can be nerve-wracking, it’s clear there are many ways to offer discounts without devaluing your brand. Used strategically, these discounting tactics will grow a loyal, content and regular customer base.