{"id":8176,"date":"2023-02-09T15:08:24","date_gmt":"2023-02-09T15:08:24","guid":{"rendered":"https:\/\/presspay.ng\/news\/?p=8176"},"modified":"2023-02-09T15:12:41","modified_gmt":"2023-02-09T15:12:41","slug":"how-offering-discounts-hinders-your-business-growth","status":"publish","type":"post","link":"https:\/\/presspay.ng\/news\/how-offering-discounts-hinders-your-business-growth\/","title":{"rendered":"How Offering Discounts Hinders Your Business Growth"},"content":{"rendered":"\n

In the subscription arena, and in the B2C environment in general, discounts<\/a> seem to be the norm. The assumption is that discounts help incentivize purchases that wouldn’t typically happen, leading to new customers.<\/p>\n\n\n\n

The reality is completely different. Discounts, when used incorrectly, can greatly hinder growth and decrease your chances of attracting long-term, brand loyalists<\/a>. Here’s why:<\/p>\n\n\n\n

Discounts attract the wrong types of customers<\/h2>\n\n\n\n

One of the fundamental issues with using discounts is that they attract the wrong type of customers to your brand. Customers who join a subscription service due to a discount are often shopping for price instead of unique and exclusive brand offerings. They’ll leave the minute they find a better deal.<\/p>\n\n\n\n

This lack of customer loyalty has far-reaching implications. Data shows that only 52% of consumers<\/a> who sign up for a new retail subscription will actually keep it. Higher discounts have been linked to decreased willingness to pay renewal fees. Plus, data from QPilot found<\/a> that the more discounts you offer, the more churn you’ll have.<\/p>\n\n\n\n

Instead, engage customers in long-term commitment opportunities. Research from Attest<\/a> found that customers see more value in a 12-month commitment with two months free than with a shorter commitment coupled with larger monetary savings.<\/p>\n\n\n\n

Discounts devalue your brand<\/h2>\n\n\n\n

The strength of the subscription-based model is in its ability to create belonging. As Jay Myers of Bold Commerce said at SubSummit<\/a>, “People want to be a member of a brand, like a member of a sports team.”<\/p>\n\n\n\n

Promo codes and discounts negate this approach. According to Nancy Harhut at HBT Marketing, coupon codes lead to distracted customers, with studies showing 27%<\/a> of potential buyers abandoning their carts in search of coupon codes.<\/p>\n\n\n\n

Coupon codes can also cause consumers to have post-purchase regret. When a customer pays full price for a product and later sees a promo code spot offering the same item or service for a discount, they begin to question the value of their previous purchase.<\/p>\n\n\n\n

Discounts train a consumer to think they can get your product somewhere else for less money. This ultimately makes your product or service appear replaceable.<\/p>\n\n\n\n

Instead, look to attract those who are shopping for experience and community. The strongest brands put an emphasis on the value they can provide in a customer’s journey<\/a>.<\/p>\n\n\n\n

Discounts directly impact perceived customer value<\/h2>\n\n\n\n

Offering a discount puts your name in the marketplace, but it doesn’t set you apart. In fact, the vast majority of subscription-based cancellations stem from voluntary churn, according to SUBTA’s State of Subscription Annual Report<\/a>. Factors include price, perceived value and poor customer service.<\/p>\n\n\n\n

That’s why the best brands focus on identifying what their target customer wants and delivering on that value. This involves shifting to a lifecycle journey, where brands consider the experiences a customer faces as they go through life. Then, they perfect a core offering that helps in that lifecycle.<\/p>\n\n\n\n

This in-depth understanding of a customer<\/a> allows you to stay engaged in a way no discount can. Rather than offering a promo code, brands with a central understanding of client value can identify value-add opportunities to engage their ideal customer on a regular basis, instigating belonging and inclusion.<\/p>\n\n\n\n

What to offer instead<\/h2>\n\n\n\n

Discounts are not the only way to gain customers<\/a> or increase value. Rather, consider some of these tactics in the new year:<\/p>\n\n\n\n