A Home Product Manufacturer’s Guide to Discount vs Value-Based Marketing

When it comes to marketing, nothing can entice new or returning customers to check out your products quite like a great deal. With so much competition and the internet at their fingertips, having the best price can influence customers to click the “add to cart” button.

But discounts aren’t the only way to increase sales. Value-based marketing is equally as powerful.

While both strategies can work well to increase sales, before implementing either one, you should be aware that the different methods at your disposal can also alter customer expectations and the long-term positioning of your brand.

Discount Pricing

Discount-based marketing draws in new customers by cutting the cost they have to pay for your products. You can take many approaches depending on your specific industry and the type of consumer you mean to convert into a paying customer.

Buy One Get One Free

BOGO discounts are simply 50% off discounts that make people feel like they’re getting extra value from their purchase – which is why they work so well!

First-Time Customer Discount

Many first-time visitors to your site will be hesitant to purchase, so many businesses offer new visitors a discount. It can be simple, like a pop-up with a discount code at checkout or something more interactive, like spinning a wheel to earn a discount. Discounts can incentivize hesitant shoppers to move from “add to cart” to “checkout.”

New Product Discounts

Even consistent customers may hesitate to try a new product or a variation on an old one. Without any experience or reviews to guarantee the quality of the product, consumers may choose to spend their money elsewhere. Offering a discount can help customers feel better about trying something new.

Tiered Discounts

Discounts available at a minimum total threshold encourage shoppers to keep spending to unlock greater savings. If they spend, for instance, $150, they receive a small discount. If they spend $250, they receive a better discount, and so on. This strategy is a great way to ensure your business still profits despite offering discounts, particularly if shipping is involved.

Flash Sales

Flash sales run for a very short time and capitalize on a person’s fear of missing out (FOMO). Urgency helps prevent abandoned carts. A customer has to make a decision right away and doesn’t know when or if you’ll offer a similar deal again. If you announce flash sales a few days ahead of time on social media, it’s also a great way to reward your followers. They might have missed it if they didn’t keep up with you.

Early Bird VIP

If you offer reward programs or membership, it’s important to make your most loyal customers feel pampered. Offering deals ahead of time can give your VIP customers a feeling of exclusivity and incentivize them to take action early — before others have access to a sale.

Earned Discounts

Sometimes, you can make your customers work for their discounts. Offer a discount code in exchange for filling out a survey, leaving a review, or subscribing to your newsletter. Or offer discounts, credit, or reimbursement if they refer more customers to you. This method ensures both your business and your customers benefit in the exchange.

Specific Ways to Apply Discounts

Different types of discounts provide various benefits to your business, but how you implement them also matters.

Provide a code that customers must enter manually at checkout.

This gives you control and customers a sense of exclusivity – not everyone received the code. You can set the dates through which a code remains valid and even limit the number of uses per code to create urgency and to ensure your business doesn’t lose money.

Automatically apply discounts at checkout.

With one less step at checkout, you may see more conversions. This approach works well for small discounts and limited-time deals — like flash sales.

Value Based Marketing

Value-based marketing, an alternative to discount marketing, offers additional worth to customers if they purchase your product at full price. In these cases, customers know they are receiving more for the same amount of money.

Free Gift or Exclusive Item with Purchase

Customers love to open what feels like a goody bag. Discounting goods can make your customers perceive your product as less valuable. Offering an additional item can make your products seem more desirable and help your customers feel like they received something no one else has. An extra tool, a product upgrade, branded merchandise, a limited-run item, or a storage bag can all make your customer feel special.

Extra Product

Offering a higher percentage of a product for the same price or adding an extra product with a bundle makes customers feel like they’re getting bang for their buck. Perhaps a customer buys four windows and gets the fifth free or buys a bag of mulch priced the same as one of your competitors but receives 20% more.

Free New Product with Purchase

Offering a new product for free is a great way to get customers to try it without taking a risk. Perhaps you’ve developed a new waterproof fabric for your outdoor furniture. Consider adding in a free throw pillow or cushion with a furniture purchase.

Free Shipping or Delivery

Customers may feel entitled to free shipping these days, but it’s a decidedly effective tactic. If they’ve spent a lot of money on a large, custom product, and you offer to deliver it for free, they’ll feel like you’ve rolled out the red carpet for them rather than feeling resentful for an extra cost at checkout.

Extended Warranty

If a customer is still determining the quality of a product, they may be more inclined to purchase it if you offer a generous warranty. For instance, many modern products are made from newer, less-known materials, causing questions about the quality or longevity. Offering a longer warranty than usual could give them comfort in moving forward.

Free Installation or Setup

Time is money, so offering free installation, setup, or support can take a huge burden off your customer’s back. If they know they don’t have to hire separate labor, figure out how to install something on their own, or have someone to call with questions – they’ll be more likely to purchase.

Include an Upgrade at No Cost

Offer to include a higher quality material, or a personalization, without extra cost. This approach can be especially helpful for high-ticket items. Your product may be worth a high price tag, but a customer may still feel guilty about spending that much. Demonstrate that the price is worth it by adding a touch more gilding, and they may feel more excited about their choice.

Which approach is right for your business?

When deciding your marketing strategy, ask what might keep a customer from buying your product — and which approach will best mitigate their concerns. Then, consider which solution best represents your brand identity.
Discounts are not bad — but they do set the precedence for clients. Some industries are discount-centric. As a product moves toward a commodity, discounts are more common. Customers will begin to expect discounts and may choose alternative options that do.
However, discount marketing may not fit your brand’s image if you sell high-quality custom doors or furniture. You want to enforce the quality and luxury of your goods. In cases where your brand falls more to the luxury side, consider offering additional value to your customers instead. You’ll reinforce your image while still enticing customers.
Adding value sets a different mindset for the consumer, driving up the perceived-value of your goods.
But you may see less of a bump in sales than you would if you discounted your goods.

Tip! Blend Approaches for Faster Sales During Peak Sales Periods

Whether you sell to consumers, dealers, or both — you may face stiffer sales competition during holidays and other seasons, so it may be a good time to blend both approaches. Read through the approaches above and creatively blend ideas that work for your brand and will appeal to your buyers.
For questions and advice, reach out to the team at Perk Brands today to find out how your business can grow through discount or value-based marketing.
About the Author

Jason Otis is the president of Perk Brands and founder of Built for Home. Perk Brands is a digital marketing agency that partners with home product manufacturers to make their products easy to find and buy. Built for Home is a community of home product manufacturers and a resource for buyers to find products that make their lives better at home.


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