In times of economic hardship, you’ll notice many companies first strategic action is to start circulating an abundance of coupons and promoting constant sales. They’ll also use any outlet they can to get the word out whether it is through e-mails, printed materials, newspapers or any other channel of media. Discounting prices may work in the short term, but they can be extremely harmful to a brand in the long run.
While a company’s initial coupons will bring in customers for some immediate sales, they’ll also train them to believe the company’s regular prices are too expensive. In doing this, the customer might eventually stop doing business with that company unless they have a coupon. This can become a huge problem for any brand when you have to sell your product at a constantly discounted price, and thus resulting in very little profit. So what is the point? Do you want your company labeled as a “Discount Business”?
It may seem like the perfect solution during times when the economy is rough, especially when the competition is utilizing the same tactic… it’s simply peer pressure and no brand should have to buy into it. Stick to your “culture” and business model.
In lieu of offering discounted prices, focus on what sets your brand apart and what you offer that appeals to your clients. Providing efficient customer service and spreading a clear message with your branding will benefit your business so much more long term than any coupons ever will.
Source: Laura Ries “Ries’ Pieces”, http://www.ries.typepad.com