Promotional Pricing Strategies: How to Use Discounts and Deals to Drive Sales?
Shopping and bargains go together like peanut butter and jelly. We all love a good deal. In fact, the thrill of finding a bargain can light up the same parts of our brain as falling in love! As a business owner, you can tap into this powerful psychological motivator to boost profits with the right promotional pricing strategies.
Let’s explore some of the most effective ways to use discounts, sales, and other incentives to attract customers and increase conversions. With a strategic approach, promotions don’t have to slash your margins. Done right, they can grow your customer base and bottom line.
Hook ‘Em With Introductory Offers
Running a special deal for first-time customers is one of the best ways to acquire new business. Consider an initial purchase coupon or discounted trial offer to get new prospects hooked on your products or services.
For example, many subscription services like Netflix and Hulu offer the first month free or at a steep discount. This allows new users to sample the benefits risk-free.
The key is structuring your intro offer so you still turn a profit from subsequent purchases. Even if you lose money upfront, focus on the lifetime value of newly acquired customers.
Set a timeframe for the deal to spur prospects to act fast. Limit the offer to first-time customers only, and clearly explain how billing will work after the trial ends.
Reward Loyal Customers With VIP Pricing
You likely depend on repeat business from your existing customers. Reward them for their loyalty with special pricing offers and discounts.
Make higher-volume buyers feel like VIPs with tiered promotions based on past spending levels. For example, a customer who has spent $500 with your business gets a 10% discount code, while someone who has spent $1,000 gets 15% off.
Personalized promotions feel more exclusive and make customers feel valued. Loyalty discounts also incentivize higher spending levels. Just make sure your tiered offer structure still allows you to earn a profit from your best customers.
Bundle Products For Package Deals
Bundling related products together in discounted packages is another smart promotional pricing strategy. This allows you to boost order values and sell more to each customer.
For example, a fashion retailer might create a spring outfit bundle with a discounted price when buying select tops, bottoms, and accessories together. A software company might bundle its video editor, photo editor, and cloud storage programs into a multimedia suite.
Get creative with product pairings and bundle suggestions to increase cart sizes. Make it easy for customers by showing bundled items together in your e-commerce store or catalogs.
Piggyback On Holidays And Events
Tie your promotions and sales to major holidays, events, or cultural moments throughout the year. Piggybacking on established occasions captures attention when customer spending spikes.
For example, toy stores advertise major sales around the winter holidays. Florists and chocolate shops offer Valentine’s Day specials. Mattress brands run Presidents’ Day sales. Retailers market midsummer savings around Independence Day.
Look for events related to your industry or location too. For a local business, promotions timed to the state fair or festival weekends can draw crowds. Craft targeted offers that feel thematic and tap into pre-existing buzz.
Run Limited-Time Flash Sales
Scarcity breeds urgency. This is why limited-time flash sales work so well to create excitement and conversion FOMO (fear of missing out).
Choose a very specific timeframe, like a 48-hour weekend blowout, 12-hour flash sale, or one-day Gold Box deal on Amazon. Countdown clocks and dwindling inventory bars amp up the pressure to buy before time runs out.
You can also experiment with surprise flash sales announced via email or text alerts to loyal customers. The unexpectedness adds to the thrill of discovery.
Be sure your operations can handle any rush of orders without damaging the customer experience. Stock up on inventory and staff up on hands to fulfill a flash sale crush.
Give Free Shipping Or Reduced Minimums
According to a recent survey, 9 out of 10 consumers say free shipping impacts their purchase decision. Buyers simply love the words “free shipping”.
Offering free delivery or reducing your order minimums for free shipping during a promotion is an easy way to incentivize larger baskets.
Eat the shipping costs yourself or build them into your pricing model. Just be clear about any order total requirements to avoid customer confusion.
Consider tiered delivery discounts, like free 3-day shipping on $50+ orders or free next-day shipping on $100+ orders. The perceived extra value can induce bigger spending.
Run Contests And Sweepstakes
Contests, giveaways, and sweepstakes boost engagement and sales by making shopping entertaining. The prospect of winning free stuff sparks the same dopamine rush as getting a bargain.
Offer prizes for things like referring friends, sharing on social media, or submitting user-generated content related to your brand. Or simply enter each purchase as an entry into a giveaway.
Make the prizes enticing enough to get people excited, like your products, gift cards, or experiences. Keep entry quick and easy by limiting required fields. Promote the contests all over your website, in-store, and on social channels.
Host VIP Events For Top Customers
Throwing special events for loyal shoppers and big spenders makes them feel like true VIPs with exclusive access. Consider hosting private parties, early access shopping, workshops, or classes.
Send targeted invites to your customer VIP list and build anticipation leading up to the event. Have your staff engage guests face-to-face and share insider info or deals.
Position it as a thank you for their business and positive word-of-mouth. Lay out the red carpet to generate deeper loyalty and repeat sales. Offer takeaways like special coupons or free gifts for attendees.
Strategize Your Promos To Drive Profits
With any promotional pricing strategy, the goal is to boost sales and grow your business. But to succeed long-term, you need to do so profitably and sustainably. Here are some key tips:
- Carefully calculate discounts to still earn a margin. Don’t give away too much just to drive temporary spikes in orders.
- Use promotions to attract new customers, then focus on retaining them without discounts long-term.
- Avoid conditioning buyers to only purchase with sales. Promos should feel special, not expected.
- Test different offers and measure results. Double down on what performs best for profits.
- Automate promos when possible to reduce human effort and errors.
- Be transparent about promo terms, timing, and eligibility requirements.
- Segment and personalize offers using your customer data.
- Time promotions around peak sales cycles and seasons.
- Promote limited-inventory discounts to move slow-selling items.
Conclusion
With the right promotional pricing strategies, discounts and deals don’t have to diminish your margins. In fact, they can help you profitably acquire new customers, increase repeat sales, build loyalty, and unload excess inventory.
Keep an eye on what specific offers perform best rather than blindly relying on a spray-and-pray approach. Make promotions feel special and urgent using timing, limits, and personalization to your advantage. Reward your top customers for spending more while attracting new business.
Most importantly, do the math on your promos to ensure they drive overall growth, not just temporary spikes. With smart strategies and selective deals, you can tap into the human psychology of bargains for sustainable success. Just don’t forget the jelly to pair with your peanut butter-like pricing.
