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Five big ideas about discounting

January 25, 2012 | Online Marketing

Marketers are almost guaranteed to get discounting campaigns wrong if they don’t understand a few underlying strategic concepts about what a discount is - and isn’t. It’s not just a business tactic; it has deep anthropological roots in gift giving, a fundamental practice of social relations.

1. Discounting is a behavior: It’s not just a business tactic; it has deep anthropological roots in gift giving, a fundamental practice of social relations. Gift giving has the power to alter psychological relations. For example, if a discount is done to clear merchandise out of a warehouse, customers know that the “original price” was higher – and it could hurt your brand if they perceive your brand as being forced to give, out of weakness.


2. Not just a price reduction: A discount is part of a master strategy that theoretically is organizing everything related to a business. This strategy will determine the form, target, and location of a discount. A discount doesn't emerge from a vacuum; it's an action that is the result of a process.

If you don’t have that process, you are acting arbitrarily. Sure, throwing darts in the general direction of a dartboard sometimes produces a bull’s eye. But, the odds are also good that a bystander will get blinded.

3. A Discount is also a notification: In order for a discount to be successful, people have to be aware that it's happening. If a discount happens in the forest, and no one's there to buy the merchandise, is it really a discount? If your goal is sales, and not metaphysical exploration, the answer is a pretty clear "no."

Get the full story at Econsultancy

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