Email Marketing: Discounting Your Revenue and Your Business

Posted by Scott Cohen On December 11, 2011 in story time I 0 Comments

All too often, we work with clients whose email marketing consists of one discount after another—10%  off, 20% off, $20 off a purchase of $100 or more and so on. This is nothing new.

Yet, if you’re not a clearance business, then offering discounts in every email is just a bad idea.

Think about it in another way: Ask your CEO, CFO, COO, Managers, or employees if it’s okay to discount their paycheck.  Say to them, “Sorry folks, we had to discount your pay by 10% because of all the discounts we’ve given this month.”

That’s certainly drastic and certainly should get their attention!

If all you do is send discount offers, then that’s all your subscribers will react to as well.  You’re training your subscribers to only respond to deals (think Pavlov’s dog).  Offering a discount with every email can erode your brand and, ultimately, your bottom line. Revenues drop, and your ability to pay your staff suffers.

If you just want sales, send a 50% off discount and sales you will get, but at what cost?  Not only do you lose those dollars, but you lose customers to price moving forward.  If you’re not in the position to be the lowest price leader, then you just can’t compete in that world long term.

(One notable exception, of course, would be a daily deal site or a clearance warehouse. Discounts ARE your business, so that would make sense.)

Spend time building your brand, your value proposition, your customer service and your customer community. Make your subscribers want to shop with you because of great service and products, not just deals.

Why does brand matter? Because all of us buy “name” brands for some products, even when we could easily have comparable products for much less. Think about the Apple iPhone versus the Samsung Galaxy S. These products do essentially the same thing, but Apple’s product is more popular—and not because they offer discounts (Apple doesn’t, obviously).

Before you send your email offer (or any message, for that matter), you should ask yourself:
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  • What makes our company and products better than our competition?  How can we differentiate our company from the competition that will make them be a loyal customer and not be focused just on price?
  • How do we increase sales sustainably without sacrificing profit margins?
  • How do we build a community of rabid fans and followers to preach the company gospel and message?
  • How can we take some of the dollars used currently for discounts and use them to build loyalty and community?

Now don’t get me wrong, having sales and discounts are great for driving sales and even for on-boarding new clients. But you need to diversify your email marketing approach for the long haul.

Try to inter-mingle some non-discount emails with value offers, education about your brand and service.  Use targeted emails to up-sell and influence without giving the store away. Use all your resources and include all departments to find what makes your company THE place to buy what you sell.  Brainstorm weekly and TEST, TEST, TEST!

Cheers, Chris

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