Would you rather give your customers a discount or reward them with free products? There is a steamy argument going on about this question and there seems not to be a right answer.
Anyway, we are going to take an objective assessment of these two and by the end of reading this post, you should be enlightened about which resonates with you.
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For starters;
What are discounts?
Discount is a promotion tactic for driving sales. Here, the buyers get to buy a product at a reduced price. Usually set at a percentage of the original price.
Sometimes a discounted price gets rid of inventories that have stayed far too long in the business’s possession.
Now, let’s consider rewards.
What are rewards?
Rewards are the alternatives to discounts. Rewards could be anything but you have to be creative with your choice of rewards so your customers do not lose the drive to partake in whatever it is you want them to do to earn the reward.
For example, if you are a fabric company, you could offer rewards such as face caps, belts, socks, etcetera. It does not have to be the product your brand is making.
Why Rewards May Be A Better Option Than Discounts
Based on studies sourced from various sources, we believe rewards may be a better route to go when looking for a program that would reward your customers to stick with your brand.
Rewards add to customer’s lifecycle
Discounts are usually a one-off thing. Once a person gets a discount, then they have to wait for another discount. But with rewards, this is far from being the case.
You can implement a reward program that would show the various rewards your customers would earn from start to finish if they fulfill certain requirements.
And findings revealed people love to get more stuff instead of paying lower prices. Hence, people would be encouraged to take part in earning rewards.
Rewards can promote products
Thinking of launching a new product or promoting a product that does not have too much market share as you would like. You can use the reward program to introduce such products to your customers.
And trust that if the product meets the need of your customers, they would certainly buy more of it.
Customer satisfaction
Rewards contribute to increased buyer satisfaction. Since your customer feels better as they progress higher in the reward program your business has designed.
Helps to maintain your brand’s price integrity
You may not know this, but the truth is offering discounts has a negative spillover effect on your brand. By reducing your prices, your customer may perceive that your product is not worth what you priced it at.
While this may be false. It may cause a reduced profit margin for your brand. Hence, it is in your best interest to train consumers to pay full price for their purchase instead of waiting for intermittent discounts.
