How can I run an effective discounting campaign without hurting our brand?

Having just returned from a world trip, it was interesting to see what other countries are doing in this respect.


My main port of call was Italy, where I found that the usual strict rules about Seasonal Sales starting dates simply do not apply anymore and, well before January 5, the normal winter sale date, everyone was prepared to negotiate on price, except the big chains and department stores!


It was also very clear to me how expensive Australia has become and why internet global sales will continue to grow and outpace retailers here. The problem we have in Australia is the cost of doing business, relative to the rest of the world e.g. a factory worker in China earns $2.50 an hour and for comparable work he would earn $1.50 in India!


The above is highly relevant to the question as it makes it very clear that, unless we have a keen value proposition, consumers will simply not pay high prices.


My first advice is look carefully at your product/service value proposition; times are definitely tough and both consumer and business sentiment is wary and will be so until the federal election and, depending on the outcome, may become more so.


However, regardless of the environment, we need to sell product and there are some things we can do to move stock. I prefer to do the below before reducing price unless stock is redundant/out of season, etc.


Here are some ideas:

  • Offer a new product free when your customer purchases say two or three other products – this is entirely dependent on the economics of your business.
  • Offer a product from a complementary business/range free with purchases of your product. Make sure that offer is smart and complements your range and adds value to your customer.
  • Offer an incentive – maybe an additional product or service – to customers who introduce new customers to your business.
  • Make sure every dollar you spend on advertising is effective and measurable!
  • Maintain amazing customer service and make sure your business bends over backwards for your customers.
  • Maintain your database and communicate regularly with your customers, but don’t waste their time with empty calorie newsletters and flyers.
  • Aim to give the best service in your industry – the price of that is invaluable to your customers and can help you avoid discounting.
  • Reward loyal customers – which takes me back to being certain about the quality of your product/service.

If all the above fails, take heart, even Prada now has outlet stores in Hong Kong and near Florence and customers are still lining up outside their retail stores, indicating that this type of discounting is not impacting on their brand!


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