In this post, you are going to learn the Psychology Behind Discount Prices and using them Effectively to Trigger Sales.
A lot of business owners go about giving a discount, because they feel it’s the right thing to do.
Do not be among the “since Everyone one is doing, why don’t I do it also” Group.
Don’t get me wrong, it’s good to give discounts,
But while at it, make sure you an Effective Strategy for your discount in other to boost
The aim of giving a Discount is the trigger people to buy, right? Since there’s is a reduction in price.
When you constantly Give Discounts to your Buyers, it forms a pattern of behaviour in them that, they should always expect a discount from you.
Which means you’ve built a relationship based on Price and whenever you don’t give a Discount,
they will ditch you for someone cheaper.
That’s why it is important to understand Psychology Behind it.
Why You Should not Give a Discount
This might have happened to you before,
You weren’t making enough sales as you would love, and then you decided to give discounts,
Surprise! No one Cares.
You have to understand that sometimes, it’s not because of the Price alone, that people are not buying.
It may be due to many other factors.
Also, discounts are supposed to drive emotions in your buyer’s mind,
If it doesn’t, then it’s not going to work effectively.
you will in this post, how to get your discounts right.
When You Should Give Discounts
In as much as you should not give discounts to every customer you run across, well there are some exceptions to this.
1. Your Best/Loyal Customer:
These are customers you’ve been with through thick and thin.
Customers who make payments on time and customers who are responsible for a large portion of your revenue. These are people you should work with.
These are people you should give discounts and not first time Clients who just bumped into asking for discount straight up.
You do not want to build a Relation Based on Discount Prices.
2. Bulk Sales/Purchase:
So when you are trying to negotiate with a new Client and He brings up, the “Give me a Discount” Convo.
You can overturn this in your favour and request for a Bulk order instead.
Client: Can I get a Discount?
You: If you are purchasing 3 of these products, I will give a 20% off Discount, which means you will be getting them at ₦800 each instead of ₦1000. Therefore Saving ₦600 in total.
3. Test Concept viability: If you want to launch a new product and you want to test if a concept works, you want to see if the market actually wants it.
You can start a Campaign like this on Your Website or platforms like KickStarter.
Where you can share your ideas, and those who are willing to pay for it first would get a discount.
4. If there’s a Good Story:
So when you discount, without having a good story, it could only be seen as the product/service is worth less than that.
for a Good Story, you could say,
“If you buy from this day to that, we would donate X% to a worthwhile cause”
“It’s our Anniversary, Get 30% off when your purchase from Tuesday to Thursday”
Elements of A Good Discount Strategy
The Anchor is the Original Price you attach to the Product/Service.
Before you give a Discount, it is important you put an Anchor in the buyers’ mind so they would know how much discount they are getting.
You could also apply anchors in Face to Face or telephone interactions.
“Well, we usually sell these products for $100, but because we are celebrating our 6 Years Anniversary, You will get a $50 discount if you purchase before the End of today”
“The Website I created for a Company like yours, was ₦50,000, but based on what we’ve discussed so far, it doesn’t need to be that expensive, it shouldn’t be more than ₦35,000”
In both scenarios, you’ve successfully anchored the price in the buyer’s mind for what’s it what, and all given them a Discount making sure they are aware of it.
If you give them your price Right away, they will most likely want to ask for a Discount.
2. Time Scarcity:
Adding time Time scarcity is one of the elements of discount that triggers sales.
If you are giving a discount and it’s not time-bounded, people won’t take it seriously.
They should be aware that the discount offer will not be available to them forever.
They should be compelled to take action now. Rather than later or never.
Here are some examples;
“60% off on all products until Midnight”
“Buy Two for half the Price – (Today Only)”
“Using an Actual Timer Countdown on Your Website”
3. Quantity Scarcity:
In as much as the time scarcity is important, the Quantity scarcity is also very important.
Have you ever been triggered to buy a product just because you where told that its only 5 of it that’s left?
“Only 5 Spots Left for my High Valued Online Training at ₦25,000(Half the Price)”.
and there’s a possibility that you might have come across something like this and had to make a decision on the spot.
When something is scarce, we tend to associate it value.
Apart from the fact that Diamonds are beauty and Shinny, if they weren’t scarce or you could easily pick them on your streets, they will be as valueless as stones.
As Humans, we don’t want to miss out
The Fear of Missing Out (FOMO) drives us to make instant decisions.
Once we know that, there’s a high chance of not getting the Product if we delay too much, we might as just pay for it right away.
You should use this to trigger sales.
Discount Offers, when used effectively could be used to trigger sales effectively and boost your revenue.
Discount Offers are meant to compel people to buy now (or As soon as possible), NOT LATER.
Anchor, Time Scarcity and Quantity Scarcity are the 3 Basic Elements you should your Discount around for maximum effect.
Once you use these elements, it’s now left for your customers to DECIDE.
Have you ever tried to give a discount sale in the past? What Was your experience?