Customer ServiceMarketingSales

When [and how] to offer a discount to your customers

Discounts can be a powerful tool for businesses looking to attract and retain customers, but it’s important to know when and how to offer them effectively. Here are a few key points to consider when deciding whether to offer a discount to your customers:



One of the most important considerations when offering a discount is timing. For example, offering a discount during a slow sales period can be a great way to drive traffic and boost sales. On the other hand, offering a discount during a busy period may not be as effective, as customers may already be inclined to make a purchase without the added incentive.

Target audience

Consider who you are trying to reach with your discount. Are you targeting a specific group of customers, such as loyal repeat customers or new prospects? Different types of customers may respond differently to discounts, so it’s important to consider your target audience when deciding whether to offer a discount.

Type of product or service

The type of product or service you offer can also impact the effectiveness of a discount. For example, discounts may be more effective for products or services that are considered high-end or luxury items, as they may be seen as more valuable to customers. On the other hand, discounts may not be as effective for lower-priced items or commodities that can be easily found elsewhere at a similar price.

Market conditions

Consider the current market conditions when deciding whether to offer a discount. If there is a lot of competition in your industry, offering a discount may help you stand out and attract customers. On the other hand, if demand for your product or service is high and there is little competition, you may not need to offer a discount to drive sales.

Customer lifetime value

Another factor to consider is the customer lifetime value (CLV) of your customers. CLV is a measure of how much a customer is worth to your business over their lifetime. If a customer has a high CLV, it may be worth offering them a discount to encourage them to continue doing business with you. On the other hand, if a customer has a low CLV, it may not be worth offering them a discount.

Cost of offering the discount

It’s also important to consider the cost of offering the discount, as it can impact your bottom line. Consider factors such as the cost of the discount itself, as well as any additional expenses that may be associated with offering the discount, such as marketing and advertising costs.

Other promotions

Consider any other promotions or discounts you may be offering at the same time. If you are already running a promotion or offering a discount on a different product or service, it may not be as effective to offer another discount.

Overall, there are many factors to consider when deciding whether to offer a discount to your customers. It’s important to consider the timing, target audience, type of product or service, market conditions, CLV, and cost of the discount, as well as any other promotions you may be running. By carefully considering these factors, you can determine the most effective way to use discounts to attract and retain customers for your business.

We are a team of professionals with each having two decades of experience in start-ups, sales, marketing, finance, HR, large scale project and profit centre management and running mature cross functional operations. At we are big believers that knowledge transfer is critical to our industry’s evolution. We love to share our experiences and learnings through our online resources.

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