Strategic Concepts Finds that Deep Discounts Hurt Business in Southern California

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Deep discounts are not always beneficial to sales in the long-term. In the eyes of a consumer, price is one of the top reasons to continue or discontinue interests in a product or service. When deep discounts begin to appear the consumer begins to have negative reactions to what may appear as desperate. These finding are coming from a study called "Dollars & Consumer Sense" this past January.

Retailers feel the result of their deep discounts. Discounts have not proven to always beneficial to sales in the long-term. In the eyes of a consumer, price is one of the top reasons to continue or discontinue interests in a product or service. When deep discounts begin to appear the consumer begins to have negative reactions to what may appear as desperate. These finding are coming from a study called "Dollars & Consumer Sense" this past January.

The survey results also found that if a brand did not discount participants assumed that "the product is extremely popular," and 64 percent assumed that "the product is already a good value."

"Lowering prices during a recession clearly raises suspicions among consumers," explains J. Walker Smith, Ph.D., president of the Yankelovich MONITOR and executive vice chairman of The Futures Company. "Drastic price cuts like those seen during the past holiday season create a double-barreled risk for brands. First, such price cuts generally fail to generate enough business to pay for themselves, although clearing inventory is of some value. Second, they create long-term difficulties in terms of consumer expectations."

Those "deflationary expectations" cause consumers to postpone purchases because, when they see that a price is reduced, they anticipate that prices will come down even further. "These expectations of deflation are difficult to break and can keep a category mired in unreasonably low prices for years," Smith notes.

Add value to your product or service. Make your product value known. Answer the customer's question about the value of your product before they ask and after the purchase is complete. Reduce buyer's remorse. The value of your product or service should be part of marketing statement. Your organization's attitude should be upbeat and positive with each customer contact. Each experience whether on the telephone, in your store or on your web page should be informative and captivating.

Market your organization using promotional incentives for immediate responses, more referrals and higher volume purchases. Whether an incentive is a one-time gift, or a seasonal campaign, keep your company's name in front of your clients and customers.

If you are an online business use a real motivator on your website, a seamless Amazon.com point rewards program. This point reward is truly their choice of incentives and offers all the same merchandise, travel and sporting events that you love on Amazon.com today. Amazon has been ranked #1 in customer service in the world and is a company with a billion dollars in merchandise sales.

For additional information on how deep discounts hurt business in Southern California contact Christina Tetley or visit http://www.strategicconcepts-ca.com.

Strategic Concepts' employees and partners have over 20 years of combined experience in the incentives, entertainment and marketing industries.

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Christina Tetley
Strategic Concepts
866-582-7853 ext. 703
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