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Step 1
It is good to have a good reason for discounts. Here is why, during holiday seasons, many retailers have discounts on their products to attract more customers. Many consumers are aware of this and subconsciously seek out good deals. It is important to only do this for major holidays because excessive discounts on your products damage the brand and image of quality. You should discount for major holidays where most people shop. These holidays include Thanksgiving, Christmas and New Year. Other holidays have no noticeable jump in customer levels.
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Step 2
Use discount pricing strategies on certain items only. These items are perceived by the customers as lower quality and therefore it is right in their minds that they are cheaper. For example, used items should be discounted because they are less appealing to customers.
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Step 3
Be honest with your discount pricing strategies. There are some companies that use discounts to attract customers but the prices are not actually lower. They would first mark up the price of the item and then give it a discount. While it is beneficial for the company for short terms, customers will eventually find out and regard your products / company as dishonest.
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Step 4
Do not slash prices excessively. For example, 50% discount on all items looks like you are desperate to many customers. They will immediately perceive your products as lower quality that nobody wants to buy. Excessive discount is a vicious cycle that will eat into your profits. Set a bottom line discount (usually no more than 30%) and that’s the lowest you should go on the products.
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Step 5
Use discounts as a lure to sell your other items. For example, buy one item at regular price and get the second item 30% off is a great way to give bargain shopper a peace of mind. It will also move your inventory faster because two items are sold for each transaction. As a business owner, you will always want to move inventory as fast as possible.
