Consumers are using their phones more and more as a result of the shift to digital during the previous ten years. Brands now have a fantastic opportunity to get connected to consumers. At the same time, the bar for retaining consumers’ loyalty and engagement over the long term was increased by the sheer quantity of new direct-to-consumer businesses that were springing up everywhere and spending a fortune on customer acquisition.
It can be difficult to establish and sustain relationships with customers on a variety of levels, including data collecting, software integration, communication, and budgeting for promotions. Because of this, adopting or reinstating sales promotions can become quite costly and ultimately have no beneficial effects for a company.
Before getting into the details, let’s take a look at a quick summary of the DOs and DON’Ts of promotion marketing, particularly coupon discounts:
The 100-point rule
Most buyers rely on their intuition rather than calculating the actual value of the deal. Offering percentage discounts for prices under 100 and absolute discounts for prices exceeding 100 has long been a regular practise in discount marketing.
Reasons why
Customers could be suspicious if goods are offered at a discount for no apparent reason. Is the product defective? Is the date of expiration approaching? In order to prevent appearing shady, be specific about why you are giving a discount. Perhaps you recently established a new location or a holiday is approaching. You’ll work out a solution, I have no doubt.
Display the earlier price
The proper use of reference prices is the most effective technique to change people’s views of a transaction. Make sure customers can see the item’s original pricing whenever a discount is applied. Don’t just say, “It’s off by X%,”
Discounts don’t go well with luxury.
Avoid discounting if your business strives for the highest quality and uniqueness. Discounts make people focus more on the price than the actual product, which could make them perceive your company as less opulent. VIP-only deals or a reward scheme based on invitations will certainly benefit you more.
Round your numbers.
Customers believe the gap between 4.97 and 3.96 to be lower than the difference between 5.00 and 4.00, according to studies. Make your discount stand out by using rounded values.
Contextual communication
Your offers’ perceived value will change if they are phrased contextually. For instance, “Get $X off” emphasises what the buyer can get, as opposed to The objective of “Save $X” is the loss the customer can prevent. A/B test various strategies to determine which one connects with your audience the most.
Make the most of FOMO
If you are unfamiliar with the term, FOMO stands for fear of missing out. People don’t like to miss out on amazing things, whether it’s a memorable event or a generous sale, and that’s the basic premise of this piece of customer psychology. Launching time-limited flash discounts or running product promotions for items with low stock or limited supply will increase FOMO.