Things to Consider Before Deciding on a Sale
Before you change those prices though, you might want to think about whether this is the best business decision you can make. Discount pricing strategies can work for or against you. They can hurt your business if you’re not careful.
Remember that there are advantages and disadvantages of setting a sale price on your items. You need to ask yourself, what are your exact objectives for holding a sale? What are your ideal targets? Discount pricing is an important business decision and should not be taken lightly. If you are a startup and new to the game, have your ducks in a row before you jump into the sale bandwagon.
First, the Pros of Reduced Pricing
- Increased sales volume within a short period of time
If you want to accelerate sales at a faster pace for important reasons, such as having more cash in your balance sheet, or in anticipation of slow demand for your product, or the disposal of seasonal items, then a reduced pricing strategy might be right for you.
Reduced pricing does tend to improve sales for a temporary duration. It is not intended as a lasting strategy, nor a constant go-to strategy whenever you need a push in sales. Use it sparingly. Setting sale prices for products makes them more attractive when conducted within a limited time frame.
- Sale price can act as a tipping point of buying choice
When a customer has budget issues or is confused between two similar products, the one on sale often settles the question. You can use your new sale price to give you an edge over your competitors.
When a store occasionally gets its prices cut, it makes buying easier for the customer. A sale price also helps attract new customers to your online store. It’s important to remember these effects on buyers. Remember that your discount pricing strategy needs to go beyond simply selling more products. A sale price is a powerful tool that when used correctly can bring in more customers to try out your brand.
Setting a special price on your product or range of products gives you a chance to reconnect with your customer. This is especially true when your store tends to be on the pricey side. The sales price is a way to show your customers that you care about them. What does this mean?
Creating a special price on your store at times is a gift to your customer. It gives them positive feelings when they purchase your product. Coupons or savings offers are variations of this idea. When you occasionally offer them this treat, your customers become more attached to your brand. This practice, when used sparingly and correctly, creates loyalty.
Next, the Cons of Reduced Pricing
- It affects your margins
The obvious effect of changing your product setting and creating a new sale price is that you make less money.
This is why you need to have good reasons and clear-cut objectives when you conduct a sale. You need to ask yourself, what are the trade-offs? What am I trading for this reduction in margins?
Examples of “worthwhile” benefits that offset such losses are:
- Clearing old stuff. Clearing inventory is a legitimate reason for holding a sale. Old inventory can occupy space that would otherwise be fit for newer, faster moving items. It can slow your store down, especially in a change of seasons or when you want to update your product offering. This is a way of trimming and streamlining your store to adjust the focus on fast-moving items. In this case, it’s good to hold a sale.
- Focus on sales volume. You could be shifting your strategy to selling more units instead of your margins per unit. If so, then setting reduced pricing on your items can help you achieve your target volume.
- New customer acquisition. Lower prices are a way to attract new customers to your store. These are the type of customers who would otherwise be less interested in your brand or who have already developed loyalty to your competitors. Sales are a way of bringing such customers to your store, in order to try your product.
- Encourage repeat buyers. You can attract repeat purchases by offering all kinds of discount programs. Usually, these are in the form of percentage discounts for those who purchase more items or purchase your product a second time. This is another way to develop loyalty to your brand. A little sacrifice in margins goes a long way in this case.
- It can affect your brand
Every brand has an image. This image is propagated through marketing and advertising. Beyond your product, this brand is why your customers flock to you for sales. Psychologically, setting a sale price on your items might cause the customer to perceive your brand differently.
Reduced prices may create the impression of reduced quality. Constant exposure to reduced prices might affect your brand image and customer perception of item quality, despite the fact that nothing but the price has changed.
Beyond Basic: Creative Reduced Pricing Strategies to Improve your Online Store
Here are some more tips for reduced pricing strategies to help your online business thrive:
- Have them prepay for a product to redeem a sale price.
Customers who are willing to make an advanced payment for your product or service can be rewarded through a prepayment discount. Take note that not all businesses can implement this model.
This can work for subscription-type services, such as software or membership style businesses that offer monthly selections of curated products (subscription boxes). When you create this model, you can build up your cash flow for investments or bulk procurements.
- Offer reduced pricing for volume purchases
When customers are willing to buy in bulk, offer them a sale price for the items. Decide on the quantity you wish to establish as a bulk sale.
This is a great option to move inventory faster and quickly build up cash flow for your store.
Let your bargains stand out. Offer bigger discounts for bulk purchases.
- Bundle offers
Bundled products are becoming increasingly popular these days. Not only do they create lifestyle applications for your products, they generally increase purchases overall. One example of a bundle is the coordinated selection of items that naturally work together or complement each other. Another example of a bundled offer is to put together different varieties of a product--different flavors, scents or colors--and offer them at a sale price. This way, you can incorporate slower-moving items in the bundle along with your fast-moving ones.
This is also a great idea to have your customer try the less popular items in your store or allow them to discover varieties they would otherwise not be inclined to try.
Be careful and selective in deciding which items go together in your bundle.
- Offer a seasonal sale price
It’s normal to hold a sale during special occasions, events or a change of seasons. Customers view some occasions as a tradition and are more inclined to purchase items during those days. In other words, they are in buying mode. Special holidays or seasons are a good time, therefore to try and move more inventory as fast as possible.
You can be creative depending on the event, season or occasion. You can even tailor your sale price to the date of the occasion. Whatever your idea is, annual events are always a good time to introduce a themed sale. There are widely popular discounting occasions, like Cyber Monday, Free Shipping Day, Singles’ Day, or Black Friday. On these dates, you may expect higher traffic on your site, and it helps to remember that these are people expecting a discount.
Timing matters. You need to decide when you time your sale, and the kind of products you’re willing to put out on discount.
How to Show Prices on your Strikingly Site
If you’re decided on holding a sale, then it’s time to learn how to change your product settings on your e-commerce site.
Strikingly offers you a clean and easy way to show reduced pricing.
If you already have an online store on Strikingly, adjusting your prices to reflect the sale price should be easy.
Go to the menu in your store. Edit the product section. Click on the button that says “Add Sale Price”.
There is a choice to show your sale price alongside the original price, reflected as a crossed-out price. The site will charge customers for the sale price.
After entering the crossed-out price, save your changes.
The item display now shows on sale price.
For a better grasp of this process, you can always go to the Strikingly site for a step-by-step tutorial.