A 50% Discount Is Not Enough!

It is true, the times are changing and only those businesses able to compete fiercely for a piece of the smaller pie will survive. For many, this means offering attractive discounts to increase sales. However, discounts alone aren’t enough to sustain your business. This requires adroit management, exceptional cost control and razor-sharp pricing. Do this, or be left behind.

“Discount” is clearly the watchword of marketing in the current economic environment. A 25% discount used to be a very attractive deal and was once considered a significant discount. Yet in today’s market, it barely gets a nod or a blink, certainly not enough to attract any movement at all. Clearance sales are almost giveaways, often hallmarked by deep discounts for name brand goods fresh off the rack. But how great a discount is enough and can your business survive it?

In today’s market, discounts of over 50%, and as high as 85%, are what attract attention. However, it is not just a matter of cutting price. In order for this to work the business must be run extremely well and be able to survive with such reduced margins. This requires excellence in management, marketing and operations, all maintained in total balance with debt and overhead. Without the required business controls required in place, a business cannot offer such deep discounts and survive for very long.

Yes, absolutely, use discounting as a sales and marketing tool. However, take a hard look at your business and determine exactly what you can afford to do. Know your numbers so you don’t discount yourself out of business. Make sure your discount helps your business rather than hurting it.