How discounting can damage your brand.
These days, brand image is essential in business...
Your brand is the essence of your company; it conveys your tone of voice, your business values and works to engage a particular type of audience.
Discounting repositions your brand image and can be damaging to your reputation. If you are offering a unique, quality service, then discounting can decrease the value of your brand. This is especially important if your brand image is one of exclusivity, where a discount will create a negative brand image, removing the refined image and, most probably, putting a large majority of customers off.
Obviously, different brands speak to different audiences; Lidl’s position is extremely different to that of Harrods, for example. Therefore, it is essential that you understand your target market before considering discounts, know what type of image you want to convey to your customers and make sure your business value is maintained.
Discounting may also lead to the idea of a new precedent for your brand. If you can offer this price now, why not before? Or you had this discount on, when will it next be discounted? This may put you in to tricky situations down the line and build distrust from customers.
If you cannot afford to offer a discount it will probably do more harm than good further down the line. Although you are likely to get a rush of income, in the long run discounts decrease profit margins and significantly alter budgets. If this is not something that your business can afford, it is best to steer clear of offering discounts as this can affect the quality of your product or service further down the line.
Maintaining quality is absolutely essential to your brand image. The internet can be your best friend or your worst enemy; if someone receives an amazing experience, they may leave a review, but if they get a bad experience it is straight up online for the world to see. It is vital that you aim for excellent service each and every time, especially for long term gain. It is always better to maintain your level of service than offer a quick fix bargain.
Discounts are likely to bring in more custom but more often than not the interested parties are likely to be one offs. This could affect the way you plan for the future and confuse your brand analysis. If you do offer a discount, its important that you plan meticulously, forecasting movements in sales and profit margins.
Ultimately, the most important part of brand image is understanding exactly who your customers are and creating value for them. A lot of the time that means dropping the discounts and relying on the value image of your brand. Staying true to your brand image will heighten customer loyalty, maintain your quality of service and mean success in the long run.