3 Ways to Get Your Customers to Pay Full Price For Your Products - and Never Have to Resort to Discounting
Jun 28, 2011
According to recent study from PriceGrabber.com, more consumers than ever are waiting for the last minute to get better deals on back-to-school items.
The study notes that in 2010, just over a third of shoppers said they were leaving their back-to-school purchases until the last minute, but this year that number is nearly half (49%).
Why are more and more people waiting for coupons and special deals?
Could it be that you have inadvertently trained your customers to look for a better deal–be it with a coupon, Groupon, Facebook-only special, Tweet-for-Discount, “we’ll meet or beat any other coupon” strategy, etc?
Couponing seems to have become the go to marketing strategy of many businesses these days–without any understanding of what it takes to build a loyal, long-term customer base.
Discounting might be an effective strategy for a new product launch, a grand opening, closeout or other one-time event. However, once customers realize that they can get a better deal for something that they would have considered purchasing at full price, your business is doomed.
How can you combat “coupon fatigue”?
1) Kick off a loyalty program at the same time you launch your big event.
Whether it be a grand opening, anniversary celebration, Groupon release, etc., now is the time that you will have more new customers coming into your store or restaurant than at any other time in recent memory. Get these newcomers (and old-comers too, for that matter) enrolled in a loyalty program, capture their email address and market to these folks. You did what you can to bring them in. Now it is your time to woo them back, again and again until you have earned their trust..and their business.
2) Do not discount your existing products or service.
- Instead, consider bundling.
- Consider a gift with purchase.
- Consider a Value-add.
As an example, Apple does not discount their products. However, I just saw an Apple ad for a back-to-school special offering $100 in free apps with the purchase of select MacBooks for students.
That’s value adding.
They do not discount.
Neither should you.
It is self-destructive and will make it nearly impossible to regain your previous price point. Your existing customers will always be on the look out for another coupon for your offerings– and you will have a hard time making them feel comfortable paying full retail again. That will be the end of your margins..and your business success.
3) Justify your prices.
Are you more expensive than your competition?
If so, why? Can you explain it to your customers? Do your customers understand your added value?
Are you providing education? Convenience? Better service?
If not, why not?
How can you justify your higher pricing model if you do nothing more than everyone else?
Think about what you can add to your product that differentiates your offering from everyone else’s.
- Extended Warranty.
- Extensive Product Knowledge.
- Gift with Purchase.
- Free Delivery.
- Free Gift Wrapping.
If your store becomes nothing more than a commodity, then you cannot build your brand.
You cannot build loyalty.
You will be going out of business much quicker than you are planning for it.
Nobody values obsolence, as you can see with book stores, video stores,record/music stores, etc. It will happen to many other retailers in the next decade as customers decide whether your “local value” outweighs the convenience and pricing of internet retailers.
My suggestion is to take some time out from your busy schedule over the next few weeks and visit other retailers in your area to see how they compete against the internet retailers in the same niche markets.
What additional products or services are they offering?
How are they building loyalty?
How are they treating customers?
What are they doing to build their brand?
If it is not already, your town will soon be divided into the “haves” and the “have nots”.
Does your store “have” what it takes to deter the price cutting competition and to train your customers of your added value?
Or will you be another one of the thousands of retailers each year that ” have not” value added their services, only to see your market share shrink on a regular basis.
It is your choice. How will you compete?