Why Leveraging Discounts Can Give Your Business a Competitive Edge

Consumers today have an infinite amount of information at their fingertips. Amid the sea of brands and products they have to choose from, it can be hard to stand out from competitors in your industry. That’s where promotions and strategically timed sales come in.

As a small business owner, you may ask, “What is the purpose of sales promotions?” or “Will my business benefit from discounting my products or services?”

Offering sales at strategic times throughout the year will help your company gain a competitive edge over other businesses. It will also help you connect with new and existing customers when you implement a targeted marketing strategy with the sale that is occurring.

Whether you want to connect with new customers, win back unengaged shoppers, or treat loyal followers to special perks, offering sales at strategic times throughout the year will help your business gain an edge over your competitors.

Understanding Market Dynamics and Competitiveness

To better understand what your marketing strategy needs to stand out, you need to know where your business stands concerning your industry and your competitors.

An easy way to do this is to keep up with your competitors by subscribing to their newsletters, checking in on their websites, and monitoring their pricing. When you monitor your competitor’s prices, you can then adjust yours accordingly to offer a better deal.

When looking at competitor pricing, be sure to take note of how long they are running their sale or promotions. As you prepare to set up your sale, keep in mind that promotions should create a sense of urgency — the sale won’t be around forever, so the shopper should purchase now.

This points to the high efficiency of flash sales and terminology like “for a limited time” or “this weekend only.”

Understanding these dynamics and competitiveness in your industry is crucial for guiding strategic sales decisions that drive business success and growth.

Building Customer Loyalty Through Value Perception

The first step in customer loyalty is convincing the customer to purchase your product.

Sales are an effective way to soften a new customer’s perception of risk and guide them toward making a purchase. They also can be the incentive to encourage shoppers to keep coming back — 77% of shoppers say that discounts can influence where they shop.

Promotions can even have the potential to increase the positivity and value of your brand. Consumer evaluation of the value of the deal and resulting brand attitude is often influenced by the type of offer, the way the offer is presented, consumer familiarity with the brand, and promotion frequency.

Once a sense of positivity is established, the consumer will perceive the brand to be of higher value than the competitors and become more loyal 一 all due to the initial sale.

Building customer loyalty lays the foundation for sustained sales growth and, by consistently delivering perceived value, businesses can not only retain those customers but also attract new ones through positive word-of-mouth and referrals.

The Impact and Importance of Holiday Sales

Consumer sales increase tenfold during holidays throughout the year. A well-thought-out promotional strategy not only captures the attention of potential customers but also drives them to make a purchase. Success can be seen in crafting compelling sales promotions that resonate with the target audience.

Running a promotion, particularly over festive periods, can not only provide opportunities for you to acquire new customers but also keep your loyal customers engaged. An appealing sale can foster a sense of appreciation and loyalty while encouraging repeat business and positive word-of-mouth recommendations.

Black Friday, Cyber Monday, Christmas, Valentine’s Day, Memorial Day, and 4th of July are the most common holidays that sales are held. They coincide with significant consumer spending periods, cultural celebrations, and seasonal trends, allowing companies to capitalize on consumer interest and drive business through targeted promotions and campaigns.

Specifically over the holiday season in November and December, retail sales were projected to be between $957.3 billion to $966.6 billion in 2023. This included over 100 million shoppers on Thanksgiving weekend.

Retail small businesses report that a whopping 50% of their annual revenue comes from holiday sales. Many consumers shop at small businesses to contribute to their community and even say it invokes positive feelings when supporting them. 81% of consumers are more open to receiving emails from a small business after buying from them during the holidays, allowing the business to continue to stay on its customers’ minds for future purchases.

If your competitors are running sales during important holidays and your business isn’t, you could be missing out on large amounts of revenue.

Sales and Marketing Strategy Go Hand-in-Hand

How the sale is presented and marketed can impact how many customers become interested. From social media promotion to newsletters, you need to consider the best platforms for how you’re going to entice potential shoppers with your promotions and products.

Email newsletters can convey a larger amount of information in a palatable format to your target audience.

Social media is a quicker way to discuss a sale or promotion. A story post that lasts only 24 hours for a flash sale may be a more effective medium than email. Factoring in the audience and brand will help decide which platform to promote the sale on.

General guidelines should also be put in place to ensure that customers don’t get tired of messages spamming them about sales.

More traditional retailers will run 2-4 major seasonal promotions, sprinkling in smaller promotions throughout the year. In this case, it’s the scarcity of the sale that makes them so effective.

Companies should not overdo the amount of sales promotions they have, as this returns to the point of devaluing the brand and product. Sales should be special and promote the customer to transition into the next step of actually purchasing.

Integrating sales and marketing strategies creates a unified approach that amplifies business outcomes, as demonstrated by the examples ahead.

Examples of Businesses Who Leverage Sales

Many businesses that rely on online shopping or communications have taken advantage of sales. This approach not only boosts revenue but also enhances customer engagement through interactive online experiences, personalized offers, and seamless transactions, thereby solidifying their digital presence and competitive edge in the market.

Charlotte Bio

One business that shows how successful short-term sales promotions can be is the makeup brand Charlotte Bio. Charlotte Bio earned 6x more in one day than their average income, which equated to 17% of their monthly revenue through a 6-hour flash sale. The items were merchandise they needed to clear out before expiration and were extremely discounted.

Website pop-ups, a timer, and email promotions were used in order to notify customers of the sale. Since the promotion happened for a short time, these notification methods were impactful as they encouraged consumers to act fast.

Farmer’s Dog

Another business that proved how to successfully convert potential revenue is The Farmer’s Dog, a natural dog food brand that has taken the pet world by storm. They offer first-time customers 20% off their first purchase.

Offering a first-time customer discount is an effective marketing strategy because it lowers the barrier to entry for new customers, encouraging them to try the product with less financial risk.

This initial discount can boost conversion rates and drive initial sales, serving as a powerful incentive that attracts new customers. Additionally, once these customers experience the product quality, they are more likely to become repeat buyers, increasing lifetime customer value.

WNDR Alpine

Lastly, small business WNDR Alpine, which specializes in outdoor products, has employed the bundling sales promotion technique. When customers are shopping for an item, WNDR Alpine shows common items that are purchased together and offers a 10-20% discount if those products are all added to the cart and bought. This helps move larger amounts of product by giving customers a more visual sales promotion experience.

Offering a discount on the first purchase is a great way to decrease customers’ fear because they can try your product for less. And once they know what they can expect from you, they’re usually happy to pay full price.

We Can Help Build Your Sales Strategy

It can be a tough decision to decide whether or not implementing sales promotions will be beneficial for your company.

Running discount promotions can be a powerful strategy for small businesses looking to boost revenue, attract new customers, and build brand loyalty. When executed thoughtfully, sales can not only increase short-term sales but also pave the way for long-term customer relationships and sustainable growth.

Here at BK Media, we want to ease your decision-making and help you make the right choice for your business. From new customer acquisition to nurturing relationships with your customers, we’re here to help you build the marketing strategy that’ll take your brand to the next level.

Schedule a free consultation with our team >