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Implementing an effective discount pricing strategy
- Discounts are a popular marketing strategy, but if left unmanaged, they can harm a product in the long run.
- A discount strategy is a game plan that outlines how a company includes discounts throughout the year in its pricing model.
- Running discounts benefits a company by increasing sales volume, offering a quick revenue boost and strengthening marketing messages.
- Discounts come with caveats such as discount fatigue and blindness, hitting the perceived value of a product.
- Using discounts as a mechanism within the user journey can help drive long-term growth.
- Discounts for upsells, post-trial, cancellation flow and skip trial, and referral discounts can work well as in-product mechanisms.
- On the other hand, using discounts as part of initial market penetration and base campaigns on cycle peaks can work as short term tactics.
- Companies should avoid five percent increments for discounts and run discount campaigns rarely.
- A well-considered discount strategy boosts the overall monetization model and drives sustainable growth.
- It's crucial to keep a balance between short-term gains and long-term results while using discount pricing strategies.
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