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How to Use Discount Pricing Strategies to Make More profit

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How to Use Discount Pricing Strategies to Make More profit

How Discount pricing strategies work and some strategies you can apply to your sales and as a small business owner to generate more leads, you need to find new ways to attract new customers, which One of the most common approaches is that they offer discounts. You need to set firm objectives and know the various ways you can take them to reach them.
More importantly, you need to calculate the correct matrix to reach your goals. To increase cash flow, discount pricing strategy increases your brand perception and provides the best vantage point for market demand
This article guides you on the best ways to discount your prices, set the right goals, and measure your success.

Discount Pricing Defined

Discount pricing is deceptively simple. Lower your prices, and you will sell more of your product. Unless your competition is yours, why would you intentionally reduce profits by lowering prices? It turns out that there are several possible reasons. Here are some of the most common:

• To increase sales volume: You can fill or bridge the gap between your high and low prices by selling your goods or service.
• To increase customer awareness: Everyone likes a good deal, right? And they are unlikely to tell their friends and family about it. Create buzz for your brand by providing an offer they cannot refuse.
• Distributing with outdated inventory: obsolete products clutter up your space and can be expensive to store. With the old, and with the new.
• To promote consumer loyalty: Customers who receive discounts today are the informal brand ambassadors of tomorrow.

pro’s of discount pricing

Discounting to reward customers who shop in bulk, repeat customers and employees build customer loyalty. Loss leaders are effective for retailers who need to increase traffic to the store. Promotional discounts provide temporary benefits, including rarely used, sales, revenue, and profit maximization. During a short-term grace period, more units are sold, allowing the company to reduce inventory stock and temporarily increase revenue.

con’s of discount pricing


Consider the condition of the product before choosing a discount pricing strategy. Consumers not often familiar with the brand name can often associate lower prices with lower quality, even more true. Implementing a discount pricing strategy increases the likelihood that your product will be considered low in quality. When you can get customers, who decide on price alone, other customers can choose a competitive product due to perceived quality. Lower prices can increase sales for a limited time, but do not build customer loyalty. When a low-cost option arrives, you may lose your market share. Competitors can only match your prices, or beat them. When prices are moved to absolute low prices, it is difficult to raise prices again, especially if your product is considered low in quality.

Bundled Discount

For this discount, instead of lowering the selling price of a product or service, you reduce the price of a group of items purchased together.
In one example, Beardbrand, which makes beard care products, sells discounted bundles of its products. These bundles are different varieties of the same product type – such as beard oil or mustache wax – but cheaper when purchased individually. Customers can then try different scents of the same product to find the one they like the most, or they can change the scents they use daily.
Beardbrand Bundle Product Collection.

Bundle sales come with some benefits:

  • Bundling increases the number of items you sell – since you are selling multiple items in a single order, each sale means more items sold, more revenue per order, and less cost per order. If you want to increase the number of items sold or revenue, bundled sales are a good option, regardless of margin.
  • Sell popular and less popular products together – Bundles also allow you to sell less popular products with stronger selling products. You can take advantage of the popularity of your best-selling items to entice customers, as they can buy it along with other items, as they are doing their shopping.
  • Customers try their other products – some of your products may have been marketed more extensively than others. If your other products are of the same or better quality as your most popular products, then encourage customers to try them by tying them together. You have to measure the sales of less popular varieties to see if they will increase after discounting.


However, when planning bundled discounts, you need to study carefully which products will be bundled together. If the products do not seem relevant to each other, customers may see the bundle as a vendor.


To apply a bundle discount, look at the items your customers want to buy together. Also pay attention to the problem that your strongest selling bundle product is trying to solve. Which other items in your list are solving similar problems?

Loyalty member discounts

How to Use Discount Pricing Strategies to Make More profit:Loyalty member discounts

Offering a loyalty program to your small business is a great way to consistently show customers you value them. And, it encourages customers to buy more often from you. You can give discounts to members of your loyalty program.


After a customer spends a certain amount or makes a certain number of purchases, they receive a discount. You can decide to give a discount on any product or service in your store, or you can discount some products.

Some businesses send discounts to members based on their purchasing habits. Using this strategy can help you with waste products. Loyalty member discounts may prompt the customer to purchase more expensive, related items.
For example, you have a store that sells household items. You always buy external supplies to one of your loyalty members. After purchasing a lawnmower, you give them a loyalty member rebate for the hedge trimmer

Event / Seasonal Discount

How to Use Discount Pricing Strategies to Make More profit :Event / Seasonal Discount

Event-based discounts are around a particular date or season, and they are often recurring. This includes discounts during holidays, such as promos for the new year or Valentine’s Day.
In the example below, Dan’s Chocolate has a “Super Snowman Sale” for December – a month when people want to send gifts. These chocolates are made for gifting, which is why discounts are for large orders shipped to multiple addresses.
You can offer discounts during widely recognized discounting days such as Black Friday, Cyber ​​Monday or Free Shipping Day. The offer below is from an email campaign from Bitdefender, which gives customers a 70% discount on purchases on Black Friday.
During holidays or special discount days, most people are in a “buying mindset”. If you offer discounts during these times, your business may have a share of that inflow of consumers. Seasonal discounts can help businesses in season-of-inventory sheds (steep discounts on winter clothes during summer).
But because these discounts are often made to go into inventory or attract new customers on a larger scale, these are not for high-end brands. You are likely to attract bargains rather than loyal buyers. As a result, your margins may suffer. In fact, during Black Friday, most buyers tend to lean toward items with at least the 76-percent mark. Reinforcing popular or high-end items can make products cheaper from the customer’s point of view. Customers can also postpone buying your products and will wait until seasonal discounts to get a better deal.

Volume discount


With the volume discount pricing strategy, you offer customers a discount when they buy in bulk. You give customers discounts when you buy more goods.


if you are a business-to-business company, volume discounts are particularly useful. Many businesses are required to purchase large quantities of goods.


Suppose you sell office supplies. You can offer a discounted price for customers who buy 20 or more boxes of 500 count paper.
Offering discounts for bulk purchases helps you get rid of some inventory, sell more items, and keep customers happy.

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Buy one get another for free

How to Use Discount Pricing Strategies to Make More profit:Buy one get another for free

Sometimes, a discount is not enough to get more customers. But if you offer something for free, you will be sure to attract more interest. A study published in the Journal of Marketing found that most shoppers prefer to get items for free rather than discounts — mostly because they find difficulty understanding fractions, while “free” is always understood. This behavior is also reflected in buying. In a separate survey, 93 percent of consumers reported that they took advantage of the “one buy, one free” promotion, while only 79-percent used the discount.

You do not have to stick to buying “one free to buy one” per item. You can offer a completely different item for free, combining a popular high-margin product with a freebie that is less expensive to produce, but not sold well. Or you may need more items before the customer gets a freebie, such as this “Buy 2 Get 1 Free” example from Sally Beauty.
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Because it’s simple and attractive, “buy one get one free”, it is great for attracting impulses, moving inventory, or driving sales of less popular products. Just make sure that your bundles still have a wide margin to be profitable, so that you do not give away your revenue for free.

Free shipping

How to Use Discount Pricing Strategies to Make More profit:Free shipping

Another type of discount is offering free shipping. Several studies suggest that offering free shipping can increase sales. Free shipping can also reduce your cart abandonment rate. According to a study by Business Insider, high shipping costs are the top reason shoppers abandon their online carts.
But the danger with free shipping is that it costs on packaging and delivery. Not charging for shipping can harm your business if you are operating with a low margin or if shipping costs are not included in your product prices.
To ensure that free shipping stops, free shipping may be available when you reach a certain amount in an order. An example of this is The Tie Bar, which offers free standard shipping for orders of $ 50 and more. Orders worthless or no order require special shipping.

You can limit your free shipping offer to a specific place or period. In the example below, online retailer Huckberry has an occasional “free shipping” sale, which allows you to buy anything from the site without having to pay for shipping – as long as you have a specified 24-hour window Buy within

Promotional discount

How to Use Discount Pricing Strategies to Make More profit:Promotional discount

If you want to increase customer traffic and sales, consider offering promotional discounts. These are discounts you offer for a limited time. Typically, businesses offer discounts at the end of a product’s life cycle.
Some businesses choose to offer promotions during holidays or other large events. Promotions you can offer include:
• Buy one get one (free or half off)
• Percentage on some items

Membership Models

How to Use Discount Pricing Strategies to Make More profit:Membership  Models

From Amazon Prime to Sam’s Club, subscription business models calling on customers to pay recurring fees have proved to be powerful forces for development. Membership model can:

Help encourage customers to shop with businesses where they are members,
Help businesses manage sales fluctuations with revenue from fixed recurring fees and
Helps vendors develop valuable insights into customer behavior and preferences.
Estimated revenue in the form of monthly or annual membership fees is one of the major benefits of the subscription business model. According to Robbie Kelman Baxter, founder of Menlo Park, California, author of consulting firm Peninsula Strategies and The Membership Economy, it can help businesses.

Another advantage of using the membership business model is that it can strengthen business relationships with customers. Membership models can help customers learn more about their preferences and needs, and help you design more attractive offerings. “Members can create value for other members through the community,” Baxter says.

One thing membership businesses benefit from is repeating payments from members over and over, says Susan Borso, president of Overland Park, a Kansas-based title boxing club. “First and foremost, recurring revenue estimates,” Borso says. Title Boxing Club members agree to automatically collect the business for $ 109 monthly or $ 1,199 annually through electronic fund transfer.

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