As, ad sales professionals we tend to have a love/hate relationship with discounts. Certainly discounting is an effective sales method. It is an easy way to boost sales volume quickly. It is a great way to garner interest or motivate a buyer to at least try your product. Inversely, it is also a quick way to cut into profits or commission margin.  Like any other marketing or sales technique, discounting should be done with a strategy that keeps ROI in mind. Here are some discounting dos and don’ts:

DON’T

• Discount Often: Customers will be less willing to pay regular prices if they know they can get the same product considerably cheaper. Also it gives buyers the perception the advertising is not valuable or worth the higher price.
• Discount Arbitrarily: Have a plan. Do your research. Use metrics to find when sales are slowest and consider offering promotions or discounts during those periods.
• Discount in High Demand Seasons: If you sell advertising for a product that is seasonal, there often won’t be a need to cut prices during the busy season. This is ad sales 101. Don’t cut into your profit.

DO:

• Discount to Introduce a New Product: If buyers are unwilling to take a chance on something they’ve never tried, a discount can often be great motivation. Consider also bundling two or more current offerings when available especially if you need to fill space or get rid of inventory.
• Discount to Get Rid of Excess Inventory: This should be a last resort, when all other options have been exhausted and everything has to go.
• Discount to Reward Loyal Customers Advocates: Consider a discount program for customers who make referrals. The discount cost tends to be substantially less than the acquisition cost and the customer tends to stay with you longer.
• Discount for Future Ad Purchases: Customers like being rewarded or earning a prize for their purchase. We get sales today and sales tomorrow. It’s a win-win.

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Strategic Discounting 101