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Without any doubt, offering discounts has become a big part of shopping. That’s why so many businesses have decided to include it in their offer. At the same time, we can see that a vast majority of customers enjoy this possibility.
In 2020, 88% of customers in the US used discount coupons. With all the trends saying that digitalization will increase in the future, this percentage will be even higher.
While including discount codes in your business can boost your sales performance, you should be careful about not disrupting its sustainability.
It is crucial to be aware of all the advantages and disadvantages of this approach. Learning more about them will provide you with a chance to prepare yourself better for all sorts of obstacles. Let’s take a look at some of these.
Pros
First, we would like to present you with all the most significant pros of this approach.
- Meeting the Expectations
We’ve mentioned the fact that a majority of customers like having discount codes as a possibility. In the last couple of years, this approach has established itself as a standard practice.
Not meeting this standard could cause your business to suffer a massive drop in sales relatively quickly. On the other hand, meeting these expectations will make your company look much more credible.
- Attracting New Customers
One of the key advantages of implementing this method is that customers could try the product before paying the full price. If we take a look at the research done by Rice University, we will see that businesses that offer this possibility have a 50% redemption rate.
It’s important to remember that roughly 30% of first-time buyers are likely to return to make the same purchase again. Basically, it is an approach that can help companies in the process of increasing their brand awareness.
- Cutting Advertising Costs
Every online store has one significant advantage, cheaper advertising. You don’t need to invest in pricey commercials. By including the secrets of discount stores or codes, you can have an effective advertisement without any further investment.
No person in the world would leave a good offer, especially for the product they consider significant. So, if you have something new to offer on the market, be sure to include these. If you would like to check a good example of this approach, take a look at the voga close code.
- Re-engage Current Customers
Having an established relationship with a satisfied customer is much easier than convincing a stranger that your business is credible enough. Sadly, customer-to-brand relationships become just a standalone transaction pretty often.
That’s why finding a way to re-engage current customers is an absolute must. The hardest part of the work is already complete, and you need to push it slightly in that direction.
Cons
Now, let’s check the disadvantages.
- It Can be Hefty
Implementing discount coupons without understanding the profit margins can cause incurring losses. Before you actually do that, be sure to take a look at the costs of the production and additional expenses, like the cost of materials and shipping.
Making a proper calculation is a must. Otherwise, your business can suffer from some massive losses in no time. The discount takes the money directly out of your money, after all.
- Disrupted Perception
Not only that you can suffer some financial loss because of discounts, but there is also a possibility of causing an unwanted effect on the product’s value perception.
The reason is simple, some customers who paid a lower price wouldn’t be happy to pay a higher price for the same product in the future. We don’t believe it’s necessary to say that this negative effect can affect your brand reputation significantly.
- Brand Image Decline
If offering discounts is a part of an effective strategy, customers can start to turn against your brand. For example, if you offer these only for a couple of products on your site.
Especially if these are not among the most sought-after ones. It’s not uncommon for buyers to associate discounts with damaged products. Customers can perceive this as a bad signal, and it can cause a damaging effect on your brand’s image.
- Buyers Waiting for Them
If buyers develop a habit of buying your products only when there is a discount involved, you cannot hope for more in the future. That’s why it is vital not to get carried away with providing them with a lot of these.
Instead, think about how many times you can offer these on a monthly level and prevent them from developing this kind of habit and how beneficial it can be for your business.
To Conclude
As we’ve said, it is crucial to understand all the advantages and setbacks of discount coupons before making them a part of your business. That’s why we’ve decided to provide you with some of the most significant ones. We are sure these will come in handy.
