How to offer discounts without trashing your brand

How to use discounts without trashing your brand

"The only statistics you can trust are those you falsified yourself," said William Churchill and, given that he reputedly drank 42,000 bottles of Pol Roget champagne in his lifetime, you'd hope there's some truth in that. Here's a little nugget of purest nonsense we stumbled upon recently, based on research carried out by The Logic Group and Ipsos MORI.

According to their survey of over 2,000 customers, people are more likely to be motivated to shop by earning loyalty points (27%) than they are by discounts (11%) or offers (9%).

We smell a rat. A fishy rat. We're not saying that the survey isn't 100% accurate, but there's no way those 2,000 people answered that question that way, so maybe something's been lost in translation (from English to... um...). Loyalty schemes are great, but no one's going to accrue rewards tomorrow instead of reaping benefits today. It's just not going to happen.

But here's where we do agree with The Logic Group (quoted here): “Brand Britain has become eroded as a result of rampant discounting across the board. By ‘flogging’ merchandise through widespread discounting, the prestige of many British brands is being compromised.” That's absolutely true because, for discounts to have any effect or credibility, you have to discount a) heavily and b) in great numbers. There's no point in taking out a newspaper advert saying that only the first 50 people to buy will get 70% off something. If you're presenting a discount to hundreds of thousands of people, you'd better be prepared to offer that discount to hundreds of thousands of people. And, once you do discount to that degree then, yes, you've trashed the price perception for that product, and it's all but impossible to rescue it later.

Luckily, social commerce and Co-buying allows you to do exactly that. By getting your social audience shopping and by offering a discount to only a small number of very lucky (and vocal) people, you can generate huge levels of noise and advocacy for your brand and product - that tactical discount becomes the pebble which generates ripple after ripple of buzz. And that's the point: if you want to do discounting cleverly, you'll stop this dive to the bottom that The Logic Group seems to fear, and you'll start to think about using discounts not as an end but as a means. And 100% of our clients agree.

Robin Bresnark