The Dos and Don’ts of Discounts


Everybody loves a deal, don’t they?  We’ve made it through Christmas and the Boxing Day sales, next up is the New Year sales, followed by Waitangi Day deals, then Valentines Sales, the list goes on.  It almost seems like consumers would be crazy to pay full price for items when they can just wait for the next sale – certainly true with a particular NZ homewares shop that seems to go from one sale to the next.  But what does the constant price cutting do to brands and their reputation?  If you’re not careful, discounts can have an adverse effect.


Valid reasons to offer a discount

  1. If you have excess or outdated stock.

If you have products nearing their best before date, outdated articles due to changing trends, or you’ve improved particular elements of an item, then it can be a good idea to offer this merchandise at a discounted price in the hopes of getting rid of it and retaining some profit.  Just make sure you make it crystal clear to customers why the discount is being offered.

  1. Wanting to attract new customers.

A discount might make people take a closer look at your business – especially budget-conscious customers that previously would have overlooked you.

  1. Wanting to create demand for a new product or service.

Sales discounts are designed to pique interest, and if you’re wanting to create demand and turn heads for your new offering, interest is exactly what you need.


Reasons to avoid offering a discount

  1. Can cheapen your brand.

Think how it might look to your customers if you discount.  Will they think you don’t place much value on your products or services?  Sales and special offers can greatly impact the perception that people have of your business.   They may think that you don’t stand behind what you are selling or that you don’t trust your own offerings.  You run the risk of seriously cheapening your brand.

  1. Can promote unreliability and a lack of confidence.

Above all else, consumers want quality.  If you’re not careful about any discount offered, you might give the impression to customers that you don’t believe in your product or service enough to continue to sell it at full price, and thus making them question if your products are in fact quality.

  1. Devalues that product or service and sets a precedent.

Once consumers know your bottom dollar, it’s going to be hard to get them to pay your previous full price.  Your product or service is now valued, in their eyes, at the discounted rate and they might either hold out for your next sale or shop around until they find the cheaper items elsewhere.


If you would like some insight into how you can increase your business without jeopardising your brand and profit, then get in touch with the team here at Accountants Plus. We have years of experience in the business world and can provide practical business advice to boost your profits. Contact us today.

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