- Expiring offer – valid until …
- Expiring offer – only … products left on stock.
- Offer limited only to the clients who meet the following criteria: …
I will bring in this article some light on why you might consider not having this kind of offers.
You know the promotions – you get X product cheaper, within some limitations.
Reasons for which to include an offer (detailed here: Why Clearance Sales are Psychologically “Irresistable” | Psychology Today):
- Fear of missing out.
- Assumed value.
- Focus on saving, not spending.
- Capitalizing on time investment.
If I were a retailer, would I use it? Probably. But there are some reasons to hold me back:
- Apple has almost no offer, and if they do, they’re on very special occasions (Black Friday, you’re a student, you previously owned a machine of theirs). The first reason not to use such offers is that it affects your brand. Deeply. “Apple is the brand which doesn’t do promotions”. This sounds good. It’s a nice thing, I would buy from such a company. “They don’t do discounts. Hmm, this means they value their merchandise as a quality one”. Offering discounts adversely affects your brand positioning.
- It depends on what you sell. I wouldn’t like to buy an affordable BMW, an easy-to-get jewelry. Nowadays, fake pearls are hard to distinguish from authentic ones. Yet, people still buy the authentic ones. Why do this, since they barely even differ? Why pay a premium for something of a very similar quality (you wouldn’t tell one from another in a blind test)? Why do people slightly prefer Coca-Cola over Pepsi, even if Pepsi, in blind tests, rates better? Why want more of a product which tastes poorer? There are products for which discounts don’t fit in well – like premium products.
- The promotions won’t stop. In Romania, some big retailers had huge promotions on Black Friday. Now, the question comes – would I buy a laptop in April 2013, knowing that in November I can get a similar laptop from Black Friday for a much better price? Offer one time a discount, and buyers will expect you to match that discount again in order to buy from you. If I buy snickers with 50 USD, at sales, I will have a difficult time buying next time for 80 USD, their regular price. Offer one time a discount, and the people will always expect discounts from you. Always.
- Let’s say you’re a retailer and have 80 products. You offer discounts for 5 of them. How would I feel, as a buyer, when I want to shop one of those 75 products? I feel I’m actually losing money. Not offering any discounts gives me a peace of mind – “Oh, I know that if I buy from X store, anything I will buy will be at a non-discount price. I might as well enjoy the process”. If you can’t offer discounts for every single product in your offering, people will feel bad whenever they will see a non-discounted product. It’s a similar thinking to the paradox of choice.
You probably won’t listen to my advice, and still do promotions. What are some tips on it?
- Avoid cheating. If you have a products which sells for $199, and others have it at the same price, don’t claim your product originally was $249, and it’s a discount. Don’t create fake discounts.
- Consider having discounts on all the products. If you look on any typical product on Amazon, you will see it has a discount. They actually don’t lie with this, the discount is the difference between the price at which you’ll find the product in a typical brick and mortar store and their price. There actually is a difference. Although, to some degree, they do cheat, you can get a similar price from other stores. You don’t actually save if you compare to online stores, you only save when you compare to brick and mortar businesses. A good strategy? If you offer a discount, offer a discount to every single product on your web site.
- Offer historical comparisons. I would love to buy from a store which is transparent and shows me the price evolution of a product along the previous months (even years, for some products). Show me a graph of how the price evolved, and I will be a happy client. Then, I can take an informed decision – is the promotion you claim you have a real one?
- Any text of these: “”Shop now! Expiring offer! Now! Buy now!”” is aggressive. By asking the shopper to act now, you are pushing the client, and, perhaps, not making him feel all that well.
Note: Also see the Yahoo! Group on which I present similar issues: IMRo. To join, email firstname.lastname@example.org and reply to the confirmation email.