Are You Training Your Customers to Wait for a Discount Before Making a Purchase?

  • Apr 2, 2012

Creating Greater Customer Loyalty at Retail

Austin, Texas: As a consumer products company, what are you doing to create greater customer loyalty?

Attractive retail displays?

Newspaper ads?

Multi-pack discounts?

Colorful packaging?

All of the above?

None of the above?

I just bought some ink cartridges for my laser printer and saw no reason to stock up. There were no discounts. No free gift for loyalty. No save your proofs of purchases for a premium. So I bought just what I needed, hoping that next time, I can wait for a sale or discount.

Are you training your customers to wait for a discount before making a purchase?

Before you say “NO”, think again.

Do you run discount coupons? How often.

Are your customers looking online for discount codes?

Do you run sales at regular intervals.

If so, then you are training your customers to shop on price only.

What can you do to re-train your customers?

Create a loyalty program.

Encourage customers to save proof of purchase seals, product bar codes, receipts, etc – in return for a free gift. Be sure the gift is not one of your products or you will just reduce the value of that product.

These programs can be created with a promotional firm that can verify the validity of these proofs of purchases – or you can do it internally.

A loyalty program is a reward for loyalty. Do not run this in addition to couponing or you will reduce your profitability.

Your loyalty program should be run instead of a discount.

One key point to remember: Count on breakage while calculating your gifts to offer something truly commensurate and one that will be effective..

Don’t count on 100% redemption rate — or even 50% …or 25%. If you plan on 10%, you will most likely be well under budget. Closer to 5% would be more likely. Most people won’t take the time to send in the proofs of purchases, lose them, not buy sufficient product, etc.

What does this mean? Well, if you are currently giving a $1 discount on your product, then with three proofs of purchases, you can offer a gift with a $30 retail value for the same budget. (3 times $1 times 10—which is the best-case scenario for redemption rate).

Not only will you be under budget, but you will be encouraging multiple purchases, protecting that category from competitors and re-training your customers to pay full list prices–while rewarding your loyal customers.

Discuss with a promotion firm how to set up your loyalty program that can maximize your profits while creating greater loyalty. Their experience and expertise can help you set up a program that is right for you.

Resorting to discounts is the surest way to minimize your return on investment. It is short-sighted and will hurt margins

Customer loyalty programs can be created for specific lengths of time, can be tested, created for specific retail outlets — and, best of all, maintain your price integrity. .


  • Category: Incentive Programs
  • Tags: creating customer loyalty, download incentives, incentive programs, promotion form, reducing the use of discount coupons, saving proof of purchases, setting up loyalty program