Avoid falling into the discount trap

One of our priorities as a brand

Always offer the best price possible for each of our product? That also means that we don't do too many discounts, only in a very few special occasions.


We would be cheating to all of you if we could offer you better price and still survive as a company. How come other supplement brand offer up to 70% pretty much every week? Don't you feel this is a bit strange? aren't they normally selling too expensive then? Are they producing too cheap but still pricing it pretty high, so they can discount 50, 60 or even 70%? Our cost price will never allow us to reduce our price to not even 50%. This is why GoPrimal doesnt discount products on a regular basis. An interesting article from one of our old friends, David Nielsen from Algorize who advise companies and customers about not falling into the Discount Trap! Read below

How does your company avoid falling into the discount trap?

We all know the situation. Our attention is captured by a good offer, which in now time significantly increases our desire to buy. There also nothing new in the fact that most companies, at one time or another, choose to use this tool to boost sales, especially during periods when revenue does not quite meet expectations. Unfortunately we must realize that it is a far too easy solution to use discounts, especially for smaller companies that are still in the process of establishing their brand. As experts, it is important that we do not forget our responsibilities when we together with business owners and marketing executives, try to break the code for scalable online sales. In this context, we must recognize that the temptation to run promotional campaigns is often very difficult to resist, especially when the focus is often on improving the company's revenue right now. Therefore, in order to create better conditions for deciding whether discounts are something that is benefiting your company or not, we have gathered some recommendations and considerations, which we in Algorize have had good experiences with in the past. Disclaimer: Our recommendation for both companies and agencies is to always consider the consequences carefully before launching promotional campaigns. With the right approach and strategy, discount campaigns can be an effective solution to increase sales, both in the short and long term.

Don't forget the loyal customers

“It doesn't hurt anyone to run a small promotional campaign” - in fact, it does! Too often you forget to take into account the loyal customers who recently paid the full price for the product. Ultimately, it is these customers who help keep the company running, and it is therefore important to always have these customers in mind before launching the promotional campaigns. For example, always remember to exclude the previous buyers in your promotional campaigns if they are promoted through Facebook's advertising platform. The length of time that the exclusion has to go back depends on the typical buying cycle of the products. However, our general experience says that 30 days is a good length. In addition, remember that the promotional campaigns can also help lower the true value of the products perceived by consumers. Therefore, the promotions will in many cases lead to a significant decline in revenue as soon as the campaigns are over, thus putting a sudden stop to the positive momentum that was otherwise created based on the discounts.

Always think profit before discounting your products

One thing companies often forget is to take a dive into the figures, to look more closely at the profits you have left when the day is over. Because even though you often feel that the discount rates are relatively well spent, measured in relation to the nice increase in turnover, remember that in most cases the discount is taken directly from the profit. Only for the big players in the markets, it will often be possible to negotiate special discount agreements in place with the suppliers, so that the company ensures that the campaigns do not have a significant negative impact on profits. As a small player, however, you often have to pay the same purchase price, even if the products are purchased for specific promotional campaigns. With this, only the freight costs and turnover remain to influence, which means that the discount is most often given directly from the profit and thus has a negative impact on the competitiveness of the smaller companies.

Focus on creating perceived added value

Before realizing that the promotional campaigns must be the solution to all the challenges of the business, alternative methods can be considered to create added value for the customers in connection with the purchase. This can be, for example, by giving the customer an extra product or service in the purchase, which is not so costly. It is important, however, that the product or service creates some kind of added value for the current customer, as the effect will otherwise be marginal. Ultimately, it's about knowing your target audience well enough to know which services or items are of high value to customers. If you, as a women's webshop, know that most of your customers read a specific fashion magazine, consider the possibility of giving the latest copy of the magazine if the customer orders for x amount. In such cases, it will often be possible to make a good deal with the publisher of the magazine so that the measure will not cost too much. Another option could be to offer a beautiful and exclusive gift wrap, which appeals directly to people who are looking for the perfect gift, without having to spend too much time and preparation. Only the imagination limits the possibilities when it comes to creating added value instead of giving discounts. Therefore, be creative, but always focus on the interests and needs of the target group.

Alternative discounts

After all, we know well the direction in which development is going. Many of the big players have accustomed consumer to that everything can be found on sale, making it difficult for the small players in the fight for the valuable customers. Therefore, we would like to conclude by coming up with three alternative suggestions that can have a good effect without having too much impact on the problems mentioned earlier.
  1. Increase order value with bundle offers.

Bundle solutions can be good and effective in increasing order value, while ensuring that loyal customers do not feel cheated when they have just purchased a single product at full price. This method can also be used if, as a company, you also have a large number of retailers who are sensitive to discounts to online customers.
  1. Create an online outlet

Although the term "outlet" is in many cases is used as another word for sale, it can be an effective way to drive some discounts and attract new customers to the website, without compromising the brand. For example, by creating an outlet or “last chance” section of the webshop, it is possible to sell off surplus products, which still just take up space in the store. Just remember to consider how the company's outlet is communicated in the ads, as a too aggressive approach can quickly have the same effect as if you use the words "sale" or "offer".
  1. Time-limited discounts

Unless you always have a new offer running (which for many smaller players is a difficult strategy to master), you will often experience a significant drop in sales as soon as the promotional campaigns are over. This is especially the case if you have run long-term deals on large parts of the range. One way to overcome these challenges is to run deals, with a definite time limit of 24 or 48 hours. This makes it possible to achieve a boost in revenue without affecting the overall profit, as well as the perception of the brand. Since promotional campaigns have both major drawbacks and potentially great benefits, we would like to emphasize the importance of having made some clear considerations as to how to use this tool as a company. Therefore, always think long term, even if this can be difficult, due to pressure from external forces. We experience time after time that those of our customers who choose a clear approach, whether it is a bid strategy or not, achieve the greatest success in the long run. by David Nielsen, Algorize