Disadvantages of Offering Specials Too Often
Offering a special promotion/discount is a great way to encourage new business and further establish a project. However, like many things, doing it in excess can produce unfavorable results. Firstly, having a discount offer too often will deplete its effectiveness. If something is too common or predictable, it’s no longer special, and has little meaning. However, more importantly, offering excessive or regular discounts makes a company seem desperate. Whether it is true or not, the perception is very damaging for business, and can lead to numerous problems and revenue loss. It can even result in customers believing that you are charging too much to begin with. One tip is to offer a special promotion over a longer period of time rather than repeating it. After that period, do not duplicate the discount in the immediate future.
This entry was posted on Friday, August 10th, 2007 at 12:37 am and is filed under Tips for Directory Owners. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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Good tip. Specials are effective, but need to be used in moderation. One thing that helps is to give a reason for the special - to celebrate an anniversary of the directory or something like that.
I often get asked about coupons from a *cough* certain someone *cough*, to which I reply there are none.
Although I was the first to create and implement a coupon MOD on DirectoryDump Web Directory (WSEDGTBNUJM 9.99 off on featured w/5 links) as well as offer it for others prior to being duped (what else is new), it is something I feel that should be promoted wisely, and in such a way that you’ve described above. The word ‘desperate’ really sums it up.
It is true that offering discounts to an excess is crazy. I have launched discount before PR updates to give an advantage because after the last PR update, the prices increased.
Rob, looks like I should populate that featured coupon for dump, eh.
I have been planning to do it for my directories, but was finding a reason to do it.
Jeff has given one reason for offering discounts. What could be the other reasons to offer coupons/discounts?
P.S - I agree that offering discounts time and again can damage reputation of the directory.
By the way, BOTW has offered coupons twice in the last 4-5 months.