We live in a world of discounts in 2023. No sooner have the ads been screaming at us about Black Friday and Cyber Monday, then it’s Christmas, Easter, Labor Day and so on and so forth.
No one can argue that we love a discount. Why not take the opportunity to get something for less, so we have bragging rights at the office or dinner table.
However, from a business owner’s perspective, especially an SMB, getting discount happy and expecting to run your whole operation on this basis can be incredibly dangerous for long-term profitability and indeed customer loyalty.
You run the risk of being just like everybody else, a commodity, and forcing your customers into a ‘wait and see’ approach to buying ONLY when discounts are available.
There is another way to approach this – in fact – there are many ways, and they all come back to being focused on the customer and understanding them. In recent years, the power and attention on e-commerce has been growing – some 25% of all purchases are now done online – but with this has been a chaotic move away from servicing customers and instead focusing on how cheaply and quickly we can do each deal on our website or shopping cart.
A new trend in online commerce – Customer Commerce – is the idea of putting technology back into a supportive role, simplifying your customer data into a single source of truth, and opening up ways to scale your online business. However, with Customer Commerce, this simple single source of truth approach allows you to get closer to your customers – putting more of your staff resources into servicing them personally.
One idea to consider instead of event-based discounting like Black Friday or Cyber Monday – why not offer a private, personal discount to a loyal customer based on a purchase milestone?
Many brands around the world refuse to discount, or they might discount accessories but never their popular gold standard product. Think Tiffany’s, Apple, Chanel.
Sure, your small business may not have the brand cachet of these high fliers, but you have something that a lot of big companies would kill for – customer understanding. You can use your superpower to understand customers better and service them better.
After all, price isn’t the only reason people buy from certain businesses – there are friendliness, taste, convenience, speed, and many other ways to offer value.
Research by FirstInsight suggests that price can drive sales, but quality can drive satisfaction and loyalty. Often those must-have items are not defined by how cheap they are, but how amazing, interesting or unusual they are.
Not to mention that if you always discount, you are just forcing yourself into a situation where you have to make more transactions to achieve the same overall profit. For example, if your overall profit margin is 20% on normal sales, and you discount 10%, you are effectively halving your profit, and doubling the number of sales you have to make.
A Customer Commerce, customer-led approach to your online business will allow you to have a more efficient and effective platform, data integrity, system integrity and the ability to start personalizing the approach to each customer, and this will build brand loyalty far better than becoming a discount junkie.
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ABOUT THE AUTHOR
Mikel Lindsaar, CEO and founder of StoreConnect
Mikel Lindsaar, CEO and founder of StoreConnect, is an experienced technology entrepreneur whose mission is to infuse small and medium-sized businesses with the power to implement a successful Customer Commerce strategy whilst scaling to meet growing demand.
Small businesses are often driven by a purpose to help their customers, and not just to make money. However, they can’t waste time and money setting up their business on a platform only to repeat the process by changing platforms when they want to scale, nor do they want to waste time figuring out how to integrate multiple platforms. They are seeking to provide a seamless experience for their customers, and this is possible using StoreConnect.
StoreConnect (built on the World’s Number 1 CRM, Salesforce) gives clients a complete, powerful, configurable Customer Commerce solution where they can manage their website, online and in-store sales, provide amazing customer service, run all their digital marketing campaigns, and have up-to-date detailed metrics, reporting and full understanding of their customer.
They were awarded Salesforce’s 2021 International Partner Innovation Award of the year for the Retail sector and are changing the ease with which small businesses are run ─ with a manageable price tag. StoreConnect is Time. Well spent. Visit getStoreConnect.com.