As a B2C business owner, you need to understand consumer behaviour and how to attract customers to your business. One of the most important (and interesting) areas is the impact that discounts can have on a consumer. This is a smart strategy for attracting new customers to your business and can be used as a way for smaller businesses to compete at a much higher level.
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Creating Urgency
The reason that discounts are so effective at encouraging customers to buy is that it creates urgency. When they are presented with an opportunity for a discount, it is a chance to save their money and improve their life. Discounts can create a fear of missing out (FOMO), which will encourage customers to make a purchase that they might have otherwise delayed.
Customer Satisfaction
Additionally, discounts will leave customers feeling satisfied knowing that they have improved their purchasing experience. This will help to create a stronger bond and should encourage them to return to your business (provided that you offer a high-quality product). These days, shopping is easier than ever for consumers and they will spend a long time comparing options online, so finding the perfect deal can be immensely rewarding.
There are all kinds of discounts that a business can offer to entice the consumer. A percentage off the original price is the most common and easy one to make your products stand out from the competition, but buy one get one free (BOGO) discounts are one of the best because they encourage customers to buy more than they originally would. Tiered threshold discounts are similar as they work by the customer getting a discount once they hit a certain threshold, such as 15% off when you spend $X amount. These days, free shipping is one of the best discounts that you can offer and should increase conversions.
Making Discounts Work For You
Discounts need to benefit the consumer, but you also need to find the right balance so that they work for you. You need to establish your goal whether this is to increase sales during a slow period or promote a particular product and then crunch the numbers to make sure that the discount will not eat into your profit margin. When you find the right balance, the cost of offering the discount will be balanced by the increase in sales and new customers.
Discounts can be a highly effective way for a business to increase sales and attract new customers. In a time when it is so competitive online, businesses need to find ways to stand out and discounts can have a powerful impact on customer behaviour. The key is to find the right discount to attract customers but also one that will not negatively impact your bottom line.
Understanding How Discounts Affect Consumer Behaviour
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