The problem with offering discounts to first time buyers

This article was written by Madelyn Skinner.

The Story.

I am fascinated by subscription boxes, although a little overwhelmed, too. My friends are constantly talking about their monthly makeup boxes, their newest shipment of “ugly” food, a miracle face scrub, etc. in my curiosity, I found a website that aggregates many of these subscription boxes and includes reviews.

Two weeks later, I see an ad for this site on Facebook. It’s eye-catching: they’re advertising a monthly plant delivery service, and I absolutely love succulents. I clicked through. I rarely click though on Facebook ads. I look at the plant subscription service and then go to the main page with all the boxes, and before I get halfway down the page I get a pop up.

“50% off your first box with this promo”

The Dilemma.

What?! The box right below the pop up was a natural skin care box for $60 a month, with a value of $120, so I’d only pay $30 for my first one. Seems like a great deal at first, and I’m tempted. What’s the issue here?

I was already interested, but now they’re acting desperate. PLEASE BUY SOMETHING I’LL GIVE YOU A DISCOUNT.

Why do companies think they need to give discounts to first-time customers? I was already browsing intently, I could have been a customer! Giving me a discount on my first box is a mistake: it’s like I’m lured in through false promises. I’ll have to pay double the amount next time. If I am lured in by a discount, do you think I’ll want to pay full price? Not likely.

The Solution.

Here’s what to do.

Don’t rely on a discount strategy to lure customers. Stop assuming people will not order if they don’t have discounts. When you do this, you are averaging people who are already on the fence with people who could be your next best customers. But they’re turned off now.

Focus on your branding. What’s unique about you? Don’t sell yourself short.

Bucket your customers according to personalities. Maybe you don’t need to get as granular as diving up by ESTP or INFJ, but at least understand that people are unique beyond age group and income.

We understand why companies do this, and we want to help you. Give us a call, or write and we can help develop the right strategy to get the best customers.

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