May 15, 2020
WHY DISCOUNTS WILL RUIN YOUR BRAND
by Amos Adejimi
Being new in business is not always a positive experience because often, there are many competitors to compete with. The situation gets worse when you are running a small business with low capital and you have to market your product yourself. In a bid to win over customers, you may be tempted to give discounts. As tempting as this may seem, kindly avoid it. Discounts don’t grow brands and I know this because it is a marketing and business growth strategy that I have tried out myself.
YOU CAN’T BUILD A COMMUNITY OF BRAND LOYALISTS
Brands thrive mostly when they have people who trust them. Discount price buyers are not always loyal, they come to your brand mostly when you offer a discount. When ORide launched in Lagos and Ibadan, the ride-hailing platform witnessed a surge in the request for its services and for a while, left competitors with few customers to cater to. The discounts were so affordable that a ride from Maryland to Iyana-Ipaja costs as low as N200 and Ibadan had a flat rate of N100 to any location within the city. The ride requests dropped as soon as the discounts expired because many people who took advantage of the offers in the first place cannot afford the rides’ real prices. If acquiring loyal brand evangelists for your brand is your goal, try providing quality products instead.
IT GIVES YOUR BRAND A CHEAP REPUTATION
When a brand gives out discounts, especially to first-time customers, it usually creates the perception that the brand is cheap to the audience you are trying to attract. When this happens, it creates a sense of distrust even before they do business with you. If a certain wig costs about N30,000 in almost every store, and someone is offering the same wig for N25,000, you will definitely have questions like “is the wig the real deal?” or “is this dealer trying to dupe me”. When customers have reasons to doubt your business legitimacy or competence right from start, it is usually hard to convince them that you sold a good product or provided an excellent service.
IT IS NOT SUSTAINABLE
If offering discounts is at the top of your marketing strategy, it is advisable that you stop because you may end up making sales or rendering services without making profits. In the long run, you will end up running a business that basically runs on hype and not profit. It may also pitch your small business against a big brand that can actually afford to give discounts for a longer time than you can. It should be noted that it will be hard for you to scale your business when most of your marketing strategy is discount based.
DISCOUNTS CLIENTS/CUSTOMERS MARKET YOUR BRAND TO PEOPLE LIKE THEM
When you offer discounts to new customers, they don’t usually refer your brand to clients who will pay better but people who will pay the same price or even less. This sounds like a good method of acquiring customers until all your “customers” cannot afford your premium products or services.
You can, however, offer discounts to your existing customers during a special period to appreciate them for doing business with your brand. They deserve it and will help spread the word about the quality services you offer them (not the discounts you offer). Selling values helps your brand better than focusing on the price that will bring almost everyone to your brand.
Did you find this useful? Kindly share. Thank you.
Amos Adejimi
