We’ve all seen our share of economic turbulence. People are quitting jobs in record numbers. The economy has seen better days. But in the midst of this current recession, what does your sales strategy look like?
Discounts. Promotional offers. Buy One Get One Free!
Photo by Artem Beliaikin on Unsplash
If you named any of those, then you should continue reading and find out why it’s not beneficial to offer discounts or promotional offers during hard times. There is some valid psychology behind this.
Discounting Sets a Pattern of Behavior
I know it seems harmless, right? Twenty percent off for just this week doesn’t seem like it would hurt at all. Chances are it won’t hurt every now and then, but using it in general to offset sales is typical not the answer and can potentially wreak havoc later on down the road. The outcome can be debated, but more than likely, your customers will start expecting discounts. And if you stop offering discounts suddenly, they may choose to shop somewhere else simply based on the price. Here’s my take on the psychological aspect of discounting during slow times.
The Science of Discounted Value
When you think of value, it’s common to assume MSRP (manufacturer’s suggested retail price) is a good indicator of value. The higher the price, the more valuable it must be, right?
Not Always The Case.
Sometimes it’s not obvious how valuable something is, and it’s easy to let your guard down when the economy isn’t doing too well. And that’s the catch twenty-two. Don’t sell yourself short to get a sale. Think outside the box on ways to capitalize on your product catalog or service. There’s always a sales cycle, or funnel, that your customers go through in order to purchase something from you. Be innovative with this cycle and you might find value in your products or services that you’ve never noticed before.
For example, recently I went to an oil change shop in town. There was one car in front of me getting serviced. I waited patiently with the air-conditioning running until a young man walked out to my car. As he approached, I rolled the window down, and to my surprise, he simply offered me a cold bottle of water for my wait. It was a hot day, and I didn’t have a cold drink in the car, so I was very grateful!
The oil change costed $60, which is the most I’ve ever paid for one. The customer service was unparalleled, though. I’ve never seen an oil shop so accommodating. Firstly, I was allowed to sit in my car the whole time, and that was great considering it was hot that day! We even struck up a conversation during the whole process. The technician was very polite, friendly, and a real professional, I might add. The car’s air filter was checked, as well as the tires at no extra cost. It was an overall five-star oil change, and the price seemed reasonable afterwards. And I’ll add, this was not a full-service oil-change that I had purchased, but the thoroughness of the service led me to believe otherwise.
Value Is Determined By The Customer
The value from this experience is totally my personal experience, and is not indicative of the typical service(s) offered. This was my first experience at the oil change shop, so the value that I perceive may be different from a repeat customer. But the take-away here is the value that I perceived was well worth the $60 I paid, because usually you’re stuck waiting 20-30 min (sometimes even longer) in a lobby with a group of strangers checking their phones. It’s usually an uncomfortable wait, and I’ve been known to walk to a nearby diner for coffee just to alleviate the situation.
Develop Relationships With Your Customers
Don’t be afraid to ask your customers questions and get to know them. There will always be an opportunity to improve their experience with your business, and I’ll bet you can find ways to increase value during your sales cycle.
Feedback Loop
This is crucial to see the areas customers are having good and bad experiences. If you want to continuously improve your customer experience, feedback will be your number one dataset.
Customer Personalization
Make your customers feel at home when they’re doing business with you. It goes a long way when a business accommodates their customers. A certain amount of trust is developed when a business will go out of their way to make a customer feel at home. It alleviates the pressures of sales and helps retain loyal brand shoppers instead of the ones just looking for a deal. What’s that saying?
Customer Engagement
Engaging with your customer is probably the best way to start a relationship. They may need help solving their problem and just don’t know where to start. Building a strategy around predicting your customer’s needs will help you provide exceptional customer service and build lasting relationships centered around solving your customers’ problems. One way that helps me is to visualize it on a timeline. Below I have created a simple chart graphic to show how a strategy can affect engagement with your customer versus without a strategy.
In Conclusion
Don’t undervalue your product or service. Discounts are okay, but using them to counteract slow economic activity is not going to help long-term. In fact, it might even influence your future revenue stream – and not in a good way! Instead, center your sales cycles and customer experience around providing the best customer service. Get to know your customer. Build a strategy centered around predicting your customers’ needs, and it will help facilitate engagement and awareness that will build value and trust for years to come.
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