Do Discounts Really Increase Sales?

11 years ago

Most major companies will run discounts and offers to attract new customers, so the business model works. Look at the domain companies, especially GoDaddy and Namecheap. They seem to be running coupons every week. This will bring them loads more business as everyone loves a bargain. Or another analogy is the supermarkets, they run 2 for 1 offers constantly. This not only gets rid of old lines and stock, but also entices new customers into their shops.

I bet you are like me and countless others, looking out for offers and bargains when you go shopping. Whether its clothes, food or a new car, people love to save money. The online world is no different.

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TryBPO 11 years ago

We've run discounts and it can improve sales, but it doesn't always happen across the board. It's likely worth testing. Pricing strategy is really important and something worth looking into. Typically, you'd rather sell 100 of product X at $50 than 500 of product X at $10. Less customers = less hassle.

You want to be careful with discounts though, too. You don't want your customers to start expecting you to always discount things, previous customers to be disappointed they didn't "wait" for the discount, etc. This can be problematic for you.

Another alternative is to, instead, add value for a period of time. Add in additional products/services...even if you have to pay for them. (Wholesale, hopefully) It's a way to achieve the same goal and has a more positive spin to it rather than discounting.
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kumarvijay

11 years ago

Originally Posted by MrMonetize

Most major companies will run discounts and offers to attract new customers, so the business model works. Look at the domain companies, especially GoDaddy and Namecheap. They seem to be running coupons every week. This will bring them loads more business as everyone loves a bargain. Or another analogy is the supermarkets, they run 2 for 1 offers constantly. This not only gets rid of old lines and stock, but also entices new customers into their shops.

I bet you are like me and countless others, looking out for offers and bargains when you go shopping. Whether its clothes, food or a new car, people love to save money. The online world is no different.

Yes I agree with your points.

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xInd

11 years ago

I definitely think so. I shop according to them often, so why wouldn't other buyers?

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rspadi 11 years ago

I provide a discount for all products I'm selling - usually via an exit popup once the visitor leaves my page (see the optin/sales funnel in my signature link as an example).

About 20-30% of my sales come from those second chance discount offers.
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Joan Altz

11 years ago

Depends on the offer and the discount together. An offer not desired or poorly put together still won't sell, even with a discount.

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tpw

11 years ago

A group of my friends and I test different price points in WSO's, and I would say it definitely makes a difference.

The difference between a $7 and $17 product is not that much, but the first will generally sell at least 3-5 times the first.

When I have run discounts on other products before, I always see a boost in sales.

The discount works, if you have people who have been hesitating to buy your products.

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Janice Sperry 11 years ago

Originally Posted by tpw

The difference between a $7 and $17 product is not that much, but the first will generally sell at least 3-5 times the first.

@Bill (tpw) - I am very interested in which word was the typo/mistake? I am guessing you meant "the first will generally sell at least 3-5 times the second"???
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Aivaras

11 years ago

Granting your customers the discount they request will certainly improve their loyalty, and next time they want to make a purchase they'll hopefully return. Not only can giving discounts create return business, it can also generate positive word of mouth and build your reputation as a community-minded business owner.

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Apra Barua

11 years ago

Yes, people are always happy to purchase something if they get a discount. You can offer discounts in many ways. Seasonal discounts, coupons or if you offer a subscription service, you can offer discount for subscribing for a year in advance. The model works and we see it in operation everyday by major companies.

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theaccountant

11 years ago

In the IM work from home niche exit discounts are so common it is expected. Something costs $197 , you try to exit and it is now offered for $97. As an affiliate that sucks. But it is a sale.

Away from IM niche , no discounts from me at all.

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botninja

11 years ago

I normally have a few $$ off if you buy $xx amount of bots / software from me. Okay, you don't make say $30 for three bots but instead $25, but if that person was coming to buy one anyway, grab the offer you still make money.

Horses for courses but totally agree that if you go too low then the customers you attract could cause you pain in the long run. Been there, felt that!

Saying that I now have a good few regulars that came to test my stuff on 'special offer weekends' and now put a lot of work through me.

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Dennisknows

11 years ago

Yea it can but it can also decrease the overall value of the product. Imagine how people who purchased a product for $1,000 feel when they see it advertised for $97. It will definitely attract new customers but it may imply to older customers that the product was never worth that much in the first place.

but you could always run a "One time sale" of some sort letting them know that it'll "never" be that price again.

Either way, lower prices attract people...

Dennis
The Marketing Menace

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onegoodman

11 years ago

I would say it depends, what is the product you are offering a discount on ? how much the discount is ? and what is the demand on your product. Is your product something consumable (are you expecting previous customers to buy more ) ? or are you targeting only new customers ?

These are relative questions that you need to put in mind before you jump into offering a discount.

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january14n

11 years ago

Giving discount is a good marketing strategy especially if you wanted to gain new clients or customers. It'll surely be a hit to establish your brand especially as well when you provide quality product or service.

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vadakbelle

11 years ago

Interesting discussion. I was amazed no one gave the how long is a piece of string argument here--the Warrior Forum is full of amazing, helpful posters.

I do feel like the question in and of itself requires more parameters. Judging by your question, if you're looking to increase sales, if your product is not a loss leader (just an assumption, though here) then you're shooting yourself in the foot if you want to make more sales but you're going to be making less profit with those sales.

Whatever your goals, and whatever you decide, good luck! And I wish you good planning

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brianmg1

11 years ago

Plain and simple dont you always buy the buy one get one sale if if you dont need it

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PIWIA

11 years ago

Yes.I think offering discounts occassionally is good. It can attract new customers and keep some older one.

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TimothyTorrents

11 years ago

Thanks for the replies! Definitely some helpful tips here. Now I have another question...

Do you think offering regular discounts on services will - in the long run - increase sales?

For example, 20% off on all orders in April!

...or something like that...

What do you think?

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tpw

11 years ago

Originally Posted by timbonitus

Thanks for the replies! Definitely some helpful tips here. Now I have another question...

Do you think offering regular discounts on services will - in the long run - increase sales?

For example, 20% off on all orders in April!

...or something like that...

What do you think?

Only if repeat business is the goal.

I used to sell online services, and the 20% discount for a limited time did help to get people started using a service, and when they liked the service, they came back for more.

Even my regulars got into the game by purchasing one year's worth of services during the discount months. And that was fine with me, because seeing the 4-figure purchase always made my day.

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Curtis2011

11 years ago

I saw data once that was published by Valve corporation about their Steam service.

It is an online service that sells downloadable video games.

They showed some data that said that when they have -75% off sales on games, they actually make so many more sales that they make more money than they would have made that day if they kept the price at 100%.

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Walter Parrish 11 years ago

Offer both a low end and high end product. For the low end offer discounts during holidays and periods when sales are sluggish. I believe offering discounts will boost a business due to the fact that most IM type businesses don't.

And I'm not talking anything like lowering the cost of a 1000 dollar product for 97 bucks we're not retarded here. lolol
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Cyber Star

11 years ago

That is why every WSO have One Time Offer in its buy button : to hurry people buy their WSO. And you really have to make it clear that only some people will be able to get that offer, so your product don't look like a cheap product that "always" offer discount. I am doing Amazon Affiliate program, and a product that have discount label on it is having a serious sales lately.

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nitesh

11 years ago

Yes, there is no doubt that discounts increase sales but the best factor to increase sales is the quality of the product or service.

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KimboJim

11 years ago

This is a test I heard about several years ago, I think it was with Sears or JC Penny, but it could have been some other store known for low prices.

If you've ever gone into either of these stores, then you probably notice that nearly everything is discounted. Instead of having sales, they changed over to "everyday low prices." This means that instead of 75% off a $10 shirt (thus, $2.50), they would just mark the shirt for $2.50.

The result? They lost a massive number of customers and sales. The business immediately changed back to having discounts on their items to get sales back to where they used to be.

I wish I could find the actual case study for you, but I don't know where I have it saved.

EDIT: Here's a recent example of JC Penny doing it: http://dealnews.com/features/JCPenne...es/663853.html

Accordingly, their sales fell 30% by using this strategy.

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ScottWatson

11 years ago

I don't think discounts on their own are effective, they need to be accompanied by a quality product, good high quality and targeted customers that are looking for your product, good sales copy and presentation and a good reputation.

I find scarcity is a better technique, in particular when in comes to something such as PLR products.

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Rob Harris

11 years ago

In my offline business, we have an offer to our first time customers and that helps to gain trust in us and our service. It's a short term loss to encourage people to use the service to get a long term gain by them being repeat customers, recommendations, etc.

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john richards

11 years ago

Originally Posted by timbonitus

Just curious.

Do you offer discounts on your services/products? Have you seen an increase in sales after offering a discount? Have you made more money in the long run?

Do you think it is a good idea to occasionally offer discounts on services and products?

I would just like to hear what you guys think about this. Thanks.

Hi Tim

Offering a discount is a superb way of generating more sales especially if your product is $97 or $197 and you sell it for $17you will make more sales in the long run good way to generate quick cash as long as your offer converted in the first instance.

Hope this helps

Regards

John Richards

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tylerquick

11 years ago

It really depends on who your base is... Coture companies rarely offer discounts or have sales and they do just fine, because their base is loyal. New companies or those with a fickle base have to offer sales and deep discounts every now and then. Look what is happening to JC Penny Co. right now. They are refusing to have sales or offer discounts and their target market is pissed.

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botninja

11 years ago

Well, I am giving it go over the weekend to see if I can bring in some extra buyers.
Have gone with the tactic of giving so much off if they buy xx amount at once. I have put the cutoff so they have to buy at least 2 items to qualify for the money off.

So they (hopefully) buy more than they came for, I give them a bit off and they go away happy and I get extra $$.

Fingers crossed

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Bill Hugall

11 years ago

Yes it does. There was a point where I just went straight to the downsell page to buy. That was a sale they would have not made. Discounts are simply another door for someone to enter through.

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thedanbrown

11 years ago

Is this a serious question? Of course discounts lead to more sales... not necessarily more $ but that's up to you to understand the Lifetime Value of your customers and know what type of discounts you can offer to remain profitable.

Think about it from a consumer's point of view. If you're at the super market and you want to get Coke or Pepsi but you're not a loyal brand follower so you normally just go with what you're in the mood for... Well, if coke (or pepsi) is running a promotion and offering you a discount but the other one isn't which one would you buy?

Obviously the discounted item right?

There are many other types of discounts though they are not always price discounts. You see companies offer 2 for 1, or buy this get that free, or buy this and get 20% off on your next order.... etc.

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Jonathan Joseph

11 years ago

Originally Posted by timbonitus

Just curious.

Do you offer discounts on your services/products? Have you seen an increase in sales after offering a discount? Have you made more money in the long run?

Do you think it is a good idea to occasionally offer discounts on services and products?

I would just like to hear what you guys think about this. Thanks.

I have definitely seen "countdown style" discounts work very well.

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Do Discounts Really Increase Sales?

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