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How To Win With SMS Marketing If You're Not A Discounter

  • 30 March 2015
  • Author: Sean Mcdonald
  • Number of views: 588
  • 1 Comments
How To Win With SMS Marketing If You're Not A Discounter

You may have considered SMS marketing because you've seen other companies having success but your business doesn't offer discounts. Maybe you're saying, "I don't want to be a discounter" in my business and that's prevented you from using it because that's all you've seen from other businesses. If this is how you feel, I can tell you, you're not alone. In fact, this is one of the top objections I hear for why businesses aren't using SMS marketing in their business.

I get it, too. Nobody wants to be a discounter. Discounting can have a negative connotation. "Discount" means to deduct an amount from the usual price of something. Maybe that's not in line with your business or your brand. Well, I'm here to tell you that you don't always have to offer customer discounts if you choose to use SMS Marketing.

In fact, that's actually a poor strategy, and yes, there is a strategy to discounting that can work in your favor.

Why Businesses Use Discounts?

Many businesses use discounted pricing to sell low-priced products in high quantities. Strategically, it's important to cut costs and stay competitive. Large retailers are able to demand price discounts from suppliers and make a discount pricing strategy pretty effective. It's usually impossible to compete with retailers based solely on discount pricing though, which is why it can be hard for your small business.

Aren't All Discounts The Same?

What's interesting is that many business owners don't understand the various ways they could be using discounts in the first place. They automatically assume it means losing money.Have you ever received a discount due to quantity?These discounts can be cumulative, meaning that you give it to customers that place multiple small orders or even give them a free item after a certain number purchased. The cafe I go to awards me my 11th sandwich free once I've purchased 10. I have a little punch card that keeps track of my progress. The team at Hofbrauhaus use MOBIT for their loyalty programs. They also use MOBIT to generate new in-store customers with really cool Facebook promotions.


Seasonal discounts are great for rewarding your customers who purchase during off-peak times. You see these a lot at the beginning of peak seasons.

Promotional discounts are short term to drive sales. Using promotional discounts too often though trains your customer to wait for the sale and that may damage the overall profitability of the product or service.

That's why we never focus on always sending promotional discounts, because customers can become blind to offers if that's all they receive.

Then there are loss leaders. These are the items you discount that are designed to bring customers into the store, where they will hopefully purchase more profitable products as well. Loss leaders should change regularly so you can keep customers coming back.

The Good Side of Discount Pricing

Loyalty from your customers is important. A study from Marketing Metrics showed that the probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%. If you leverage discounts to reward volume shoppers and repeat customers, you'll create loyalty. See below how the PGA use mobile coupons and MOBIT to drive new course visitors and traffic to their pro chops.

PGA drives sales with mobile coupons and MOBIT

Loss leaders are effective for retailers who need to increase traffic in store. Promotional discounts used sparingly, offer temporary advantages including maximizing sales, revenue and profit. Offering short term discount periods, more items  can be sold, allowing a company to decrease inventory and temporarily raise revenues.

Think about seasonal items. Have you ever purchased during the end of the season sale? Which do you think costs more to the business, offering a short term discount to get rid of that seasonal inventory or paying to store it somewhere where it most likely won't ever be sold? If you said ' get rid of the inventory' you're right.

The Bad Side of Discounting

Every business is different but there are some things to consider when thinking about discounting. Consumers associate low price with with low quality. This applies even more when it's from a brand the consumer isn't familiar with. Using discounts increases the chance that your product will be perceived as lower in quality. This may lead to you acquiring customers who make decisions on price alone and may find customers choosing competitors because of perceived quality.

Low prices may drive sales for a limited time, but that won't build customer loyalty. At the end of the day competitors can match your pricing anyway. When you've dropped your prices, it's sometimes even hard to raise them back up if you've created the perception of low quality.

The Key Ingredients To Discount Pricing

Frequency

It's important you use discounts sparingly and make strategic offers that align with your business goals.

Strategically

It's not smart to offer discounts that are redeemable on the busiest days of your week. You probably don't need help on Friday-Sunday. What about Monday or Tuesday though?

  • Strategically timed offers can turn your slow days into—well—not slow days.

  • Strategically timed offers can get your customers to spend more money than they typically spend when they visit your store.

  • Strategically timed offers can get customers to shop with you more in an given time period than normal.

My favorite form of offers are cash back offers. This is when you use an offer to entice your customers to spend more than they typically spend with you.

You've surely seen this before. Here is an example I found from a clothing retailer Aeropostale.

You save $10, but only when you spend $50 ore more. Aeropostale has likely seen that customers will spend a profitable percentage above $50 when having an offer like this. My team have helped retailers do this and increase their AOV by 10-20%.

If customers normally spend $100 with you, yet they'd spend over $150 if you gave them $20 back for it....you've just created an incremental lift of $30 per redeeming customer.

Not bad right.

5 Ways To Use SMS Marketing If You're Not A Discounter

1. Promote your gift cards

See how online sellers promote special offers and loyalty with mobile coupons using MOBIT.

2. Drive foot traffic with your event

See how a property investment coaching form promotes their live events.

3. Promote exclusive opportunities

See how Sally Hogshead promotes exclusive offers to her membership and when she is speaking from the stage.

4. Create more engagement

Take a look at how Sam Chand drives engagement with his content.

5. Promote new content

See how Jeff Tobe delivers exclusive content to his VIP mobile list, boosts engagement, and drives new sales.

As you can see, there are plenty of ways you can win with SMS marketing if you're not a discounter.

Mix up your mobile messaging efforts to promote new products, cross-channel campaigns, events, exclusive opportunities and more and you can add a new engaging mobile channel to your marketing strategy.

What other programs have you seen that don't include discounts that you like?

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1 comments on article "How To Win With SMS Marketing If You're Not A Discounter"

Here's A Mobile Engagement Strategy That Works

7/16/2015 8:58 AM

[…] It’s important to know that incentive doesn’t always have to be monetary. You can still win without being a discounter. […]

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