An age-old question with an answer that is complex, yet oddly simple. Firstly, we want to re-iterate that as an independent sole trader, we recognise you are up against some big competitors in the field. But assure you that you have plenty setting you apart from them. It won’t come as a surprise to know that the big chains focus is more volume-based, with a lesser emphasis on quality. Whereas for you that is reversed. What does this have to do with discounts you wonder? Well, it is evident that for the bigger volume-based players in the game that discounting is very much a successful sales method. One that as a sole trader you will never be able to match. There is a lot of pressure in these times to price match and to offer discounts on your quality products and sometimes we give in to these pressures out of emotional burden.
But what is the true cost of a discount? And how can we still be profitable and attractive to the consumer without giving into the request or easy temptation of a discount?
Well, let’s crunch some numbers.
For arguments sake, a customer visits your practice and is interested in a pair of designer sunglasses with prescription polarised lenses that are valued by you at $600. This customer informs you that down the road at a local chain store they are offering the ‘exact’ same for $540. Inadvertently they are asking you for a 10% discount or even better. This challenge places you in a difficult position of agreeing to the customer request or possibly risking the loss of their business.
What does 10% equate to in the long term though?
Hypothetically speaking to put this argument into perspective. Using the example above of 10% on a $600 pair, that is a discount of $60 each time it is applied. Say on average, you discount 10 pairs of spectacles at this rate every week, that figure then sits at $600 each week, then equating to roughly $2400 per month. Before you know it, over the space of a year you have discounted your way out of $28,000 worth of profitability. Now we don’t need to tell you what you could do with that amount of extra money in your business, because we’re sure you are now already thinking about it.
What are your alternatives?
If discounting isn’t a sustainable offering, what options are you left with to invite business in your store. First and foremost, have faith in your customer service experience. It is truly unbeatable when compared to the chain stores and in effect should be enough to withhold return custom from your clientele. On occasion simply explaining to the customer the value of your product and service in comparison to the chain stores down the road is enough. As you know, the wording ‘exact pair’ will be unlikely to be true. Sure, the frame may be the same, but the lenses and service you offer won’t even come close to that of what they are offering. Placing emphasis on the quality of your product and educating customers on what exactly goes into creating each pair of individualised spectacles is important to influence the consumer decision. Trusting the integrity of your business is essential to success in this space.
Other offer-based incentives
If you are still wishing to give an offer-based incentive to shop at your store, there are plenty available that won’t have such an impact on your bank account. Why not consider a second pair of single vision spectacles offer. With frame options from a budget line this option, cost wise, is significantly less to you and your business, however, feels more valuable and personable to the customer. This offering can be marketed as either free or half price second pair with every complete pair sale. A simple offering, that is effectively more valuable and useful to your clients than a $60 discount. A win for both you and your clients without breaking the bank! Another way is to reward return custom with a loyalty program that rewards clients who continue to shop with you. This may mean for instance on their 5th visit to you they receive a free pair of spectacles, or they receive a 5% discount on their purchase (a discount cost you are able to wear as they have paid full price for their last 4 pairs). Irrespective of your offering, you have most definitely got a service that your large chain competitors cannot match, and this will forever set you apart more than dollar value.
Of course, at times, you won’t want to lose a sale and you will give a discount. We understand that discounting isn’t in all cases avoidable, but instead of it being your ‘go to’ sales incentive, perhaps this will give you some other tools to draw upon to confidently steer a customer away from a price-based benefit of shopping with you.
If you are looking to market a second pair alternative in your next campaign or in your everyday recalls – simply let us know! We will sort you out with an inviting graphic to match your branding and have you spreading the word of a much more sustainable sales incentive than a discount in no time at all!
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