Sales Discounts & Quality Conflict
Drawbacks of Some Discounts
Frequent and significant discounts can kill your motorcycle company’s positioning and lower your sales. Yes, discounting is something companies frequently do. And it can significantly and negatively impact your company’s bottom line.
Next, there are many pros and cons to offering discounts. One con that I’ll highlight is that they can hurt your marketing positioning strategy as a top-quality brand.
First, let me clarify what a market positioning strategy is. It distinguishes and improves the visibility and perception of your brand from other brands by communicating your company’s competitive advantages.
With brands positioned by their quality, sales discounts must be just that: special/unique/uncommon. But with frequent or significant discounts, your audience will stop viewing your motorcycle company and brand as top-quality. Instead, they might consider it “cheap” or a commodity. Having this happen to your company is so significant that your profit drops and might cause your business to close.
Impact of Lower Perceived Quality
Like most site owners, you’ve put a lot of work into differentiating your brand and products to be top-quality. But with large and frequent discounts, you can lose all of the progress from the marketing efforts you’ve put into being perceived as a quality brand. Here’s a list of negative things that happen when your brand goes from being viewed as top-quality to cheap:
- Your products will no longer be perceived as top-quality, even if they are.
- With frequent or huge discounts, people can start doubting the quality of your products and your motorcycle company.
- Your target audience can now view your regular/undiscounted prices as overinflated.
- People can stop buying your products or services between sales, knowing your next sale is approaching.
- To generate a solid number of sales, you must offer discounts regularly, reducing your profit margin.
- You lose the sales of people who prefer spending more money to get the highest-quality biker products. Many people do this.
- Now, you don’t profit as much from loyal customers who have purchased and will purchase your products at full price.
- Sometimes, since people see your brand as cheap, they will buy from a competitor they perceive as top-quality.
- Selling by lowering the price can be a losing battle for another reason. Your larger competitors can often offer similar products at a lower cost.
- When you discount your products, your profit margin drops.
- Lower profit margins will impact your marketing budget, which you don’t want to cut. Marketing is a big part of generating revenue from discounted and non-discounted sales.
Even if you have one of these problems because of sales discounts, it will significantly impact your bottom line. But if you have a few of the above problems, you can see how the specials will substantially impact your bottom line. More than likely, you will have created many issues, and having unnecessary problems that negatively and significantly impact your company is a wreck.
You’ve seen companies with regular and significant discounts on their websites and social pages. What do you think when you see them on these pages? And what do you think when their sites say they offer their products at 50% off or even higher discounts? What do you think of that motorcycle company and its products or services when you see this? You can think of a number of the items that impact a lower perceived quality list.
These discounts can quickly lower your company’s profit by 10%, 20%, or even more. Reversing this problem is complex and will take a long time. Again, think of your own experience. Would your opinion change in a year? Mine wouldn’t.
Brand Strategizing
Before your marketing company offers frequent discounts, it must first determine your company’s branding strategy and then consider your discounting strategy carefully.
Also, they can’t charge a premium for products that don’t meet your product/service’s segment pricing standards, which creates other significant problems. However, there are ways to increase your sales without hurting the quality perception of your brand.
Since I’m detailing things that can impact your site’s revenue, here’s a way to positively change your revenue – have a top-quality customer service article. In this blog article, I provide an example of how quality service has positively impacted my loyalty and made me a lifelong customer.
Another way to increase sales is to use the zero-price effect. This effect occurs when consumers put more value on an item than it is worth. One example is free shipping. Lastly, check out our Marketing Academy to learn more about marketing your site.
