How to wean your customers (and your marketing team) off vouchers and discount codes…
Seeing how 2015 has started with announcement after retailer announcement that excessive discounting severely dented margins in Q4, it's a good moment to consider another type of rampant discounting: ‘Discount Codes’.
Vouchers as Class A Drugs?
Indiscriminate scatter-gunning of discount codes cheapens your brand by creating a class of customer that always expects discounts.
This problem has been particularly pronounced in the casual dining industry where vouchers have been compared to Class A drugs and research from Mintel (1) found a third of British diners regularly use vouchers and a huge percentage say they will only visit chains if there is an offer.
It's just too easy for marketers to turn to the ‘quick fix’ to boost sales, but the fear that customer numbers will drop the minute the discounts disappear means it’s hard to quit. What we get is a real ‘tragedy of the commons’ where competitors discount away their margins chasing price sensitive switchers.
I am sure we all see evidence of this. How many of us have a wallet stuffed with a couple of ‘30% off’ coupons alongside some