Discount campaigns are undoubtedly one of the most popular and common way to boost your business profits. And they can work effectively for all types and sizes of businesses.
A good discount campaign can help you shift stock and attract new customers. Most importantly, it can increase sales quite quickly in a short amount of time, helping you reach your sales targets during slower sales periods.
But how can you ensure that your discount campaign brings in a profit?
It all starts with the basics at the planning stage. So before you start slashing prices to drum up sales, it’s essential to plan and prepare so you can ensure that your discount campaign is profitable.
To help you get started, we’ve put together a checklist to help you create a discount campaign that can quickly increase your profits and help your business grow.
- Know your numbers
The first thing you will need to understand is how the discount will affect your profit margin. Knowing your gross margin and breakeven point is crucial so you can work out the right discount price that will still make you a profit. Spend some time working out your gross margin, markup, and breakeven figures for a better understanding of how the discounted price will affect profits.
2. Find the right offer
If you have looked at your numbers in the point above, and you don’t feel that your business can afford running a direct discount campaign, consider other options you can use. There are different tactics that you can use to attract customers instead, for example, opt-in for cashback on purchase or rewards on repeat purchases. Sometimes you can offer value in the form of providing free delivery or bundle deals. Do a deep dive into your target customer and gain a better understanding of what kind of offers they find attractive. If your customers will enjoy having a discount promotion and you can make it work for your business - proceed with the campaign.
3. Perform a competitor check
Studying your competition gives you the chance to assess what discounts your competitors are offering so you can price yours accordingly. That way, you can create an offer that compels your customers to shop with you instead of your competitors. Chances are, your customers will be comparing their options, so make sure to stand out.
4. Time your discount campaign
Decide when you want to run the discount. Other than seasonal discounts, we’d recommend looking through your accounts to find any periods where your business has a dip in sales and scheduling the discount campaign for then. So set your time limits accordingly. Decide how long you want to run the discount. Consider how long you can offer the sale price while still keeping your profits healthy.
5. Define the terms and conditions
These should explain the offer in detail, clarifying who the discount applies to and how the customer can access it. It should also cover any exclusion for specific brands or products. Make sure to make those choices easy for your customers to understand.
6. Spread the word
Once the details of your discount are defined, prepare a marketing plan that will attract new customers and incentivise old customers to spend with you again. A discount campaign can only be effective if your customers know about it. Capture customer attention with tools, such as a countdown timer on your website, to incentivise customers to take action. Visitors will see that they have a limited amount of time to get their hands on your discount. It also creates a sense of scarcity and urges customers to take more immediate action.
At OMG, we are building tools to help business owners take control of their loyalty campaigns.
While we are building a payment solution for our fast-growing network of customers, who are active buyers and love discounts, we are working hard to give our partners something genuinely unique.
That is why we are making OMG Portal, completely free. It requires no hardware, no staff training, and puts you in charge of your discount promotions.
To get notified when you can gain access to OMG Portal, join our wait list.