Let's Talk Discounts - Powers Growth or Damages Margins
Hey Reader,
Have you purchased anything online during BFCM or some sale?
Well, then this newsletter is all about that, discounts. Ultimately, you are reducing your margins here.
Before we start,
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Let's Start, Reader
Today let's talk about Discounts
It's Q4 soon, the best time for Ecom brands to flourish and attract new customers. We will see slashed prices, sale everywhere, heavy discounts and more
But that leads to Are discounts really worth it?
One study concluded, customers acquired in discounts hardly come back again to shop. Until the brand is really proactive in communicating the value of the product and show the merit of buying the product at full price
So, discounts are not something you can provide any day and anytime, it should be thought about carefully and percentages worked out, before making it live
One thought I heard about discounts was
"Discounts do not actually make a sales, they just push the future revenue to the present"
How to apply - Actionable Tips
- Don't run year wide discounts, this stunts growth and forms negative perception in minds of customers. Even when you run discount offers, choose selected products and for a limited time (Stick to it). Be prompt to stop the discounts after the time has elapsed
- Instead of running direct discounts, consider giving a free-gift on purchase above a certain value. Discounts aren't tangible, but gifts are making it even more valuable for the audience than any % discount
- Offer only so much discounts, it stills leaves you profitable on your AOV. Unless your retention rates are super high, your first purchase AOV should land you into profits otherwise it's a loss for the brand.
Meme of the week
Source
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I help DTC brands to acquire customers, grow sales and scale revenue with ads and full-stack marketing while being profitable
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Shoot an email - Jainkanish001@gmail.com
Hi! I'm Kanish
Nothing much, a curious being wandering earth
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