How to use Discount & Promotions Strategies for D2C Brands

A Guide to Discount & Promotions for D2C Brands

Direct to Consumer brands always sound exciting. But , Do you even know D2C brands have to put 10X more effort as compared to B2C or B2B brands? Let me tell you why. Because D2C brands don’t have the retailer channel in the distribution process and D2C brands have an online process to reach a customer. The whole process of acquiring, converting and retaining consumers takes place under a virtual environment.

Usually D2C brands come up in the brand partnership to increase sales and widening the consumer market. But it's not the only way there are two evergreen methods to reach the consumer or should I say which push a customer to make a purchase. Discount & Promotions, I agree they're the traditional method of marketing but believe me they work in this era pretty fit.

Table of Content

Why to use Discounts and Promotions?
What is Discounting?
Methods of Discounting
What is promotion?
Types of Promotions

Why to use Discounts and Promotions?

D2C brands can use both discounts and promotions to boost brand awareness and build brand loyalty. People love to buy things which are at discounted prices. I mean just think if Balenciaga offers 50% discount on all products. The Balenciaga store will become a fish market with a full crowd. Everyone loves to get more by paying less. That's how discounts make crazy sales for the business.

At the same time, promotions are not even less, it builds your customer base. Mind you discount can boost sales but that’s not necessary it will create potential customers. But, promotions create. It builds potential customers, who will buy frequently if they like your product.

Here are some valid reasons to use discount and promotions, which are as follows :

What is Discounting?

People are afraid of giving discounts to customers as it reduces the selling price of the product. Let me clear your discount phobia. Discounting is an activity where the seller reduces the selling price of the product keeping balance in production cost and selling price, which boosts the sales. Also, discounting is said to be a kind of promotion to make people aware about the product.

It's human psychology that they tend to switch to those products which are available at less price with good quality as it boosts their savings. And as discounted prices are for only specific or limited time, people rush to make a purchase within the stipulated time, and here we go, it increases the sales.

1. Price Reduction
It is one of the most common and used methods of discounting, reducing the price of the product. You can reduce the price by like 10% OFF or by like $10 OFF, whatever suits you the most.

2. Combo Deals
Combo deals are getting discounts on buying pre-arranged products combo. For instance, on buying 5 kg rice with 1 kg of cereals get 30% off. By this it boosts the sales for more than one product at one go, and people tend to buy more.

3. Multiple Purchase
Multiple purchase is as simply its saying loud and clear, buy more to save more.For instance, Buy 2 soaps get one free offer.

4. Free shipping
Usually people buy the products when they are at low price but also they try to buy it on free shipping days, to save their money. Free shipping is one of the simplest methods of discounting.

5. Discount on future purchases
Offering discounts on future purchases is one of the best ways to keep sales high without reducing the prices. For instance, Buying electronics now, will get you 20% off on your next purchase.

Methods of Discounting

Discounts push sales, no lies. Irony is a vegetable called hop shoots that are more expensive than a gram of gold. So if its prices got reduced even 20-30% people would be crazy to buy such products. That’s how discounting works, reducing the price , creating urgency and boosting the sales. Well, here are the some common methods of discounting:

What is Promotion?

Promotion is a marketing tactic to make people aware of your brand, product or services, which increase the sales, boost the rush for your brand, product or service. If you use the promotion tool correctly, it will have long-lasting effects on your brand.

Discounting starts when the product is out. The ultimate goal of discounting is to boost sales. But in case of promotion, it starts even before the product is out, to make people aware, and create a potential customer for the product.

Types of Promotions

Promotions can vary as per the nature and life of the product. For instance, you can give advertisement in newspaper for a property or car, but you can’t choose newspaper advertisement for an Fitness band because you’ll not find your potential customers there, you‘ve to do online marketing because the person who’ll be tech savvy, will tend to buy the fitness band, not the one who is using nokia 360.

Here are some types of promotions you can use to boost your brand awareness and value to your customers for a long period of time;

1. Coupon Code
Coupon code is another strategic tool to grab the customer. Nowadays, ecommerce brands use this tactic quite swiftly. Coupon codes are for specific customers like those who made frequent orders or more no. of order at single glance. Coupon codes come with a unique code, every single time a customer retrieves a coupon it reflects on the company database , which helps in tracking the data, how’s it going? And it's even working or not how much this strategy brings to the company in parallel with the costs it takes. The best part about coupon codes is that they are instant and customers can use them on an immediate basis.

2. Loyalty Rewards
Loyalty programs are used by even B2B and B2C brands but that doesn’t mean D2C brands can’t use it. In fact it improves the D2C brand relationship with the customers. Loyalty programs can include offerings like , reward coupons, milestone coupons, reward points or a free product after a certain no. of purchases.

3. Referrals
Referral is one of the key types of promotion every brand should use, because it brings customers to the company at less cost. Also, it minimizes the customer acquisition cost. It can be done like benefiting the existing customer to refer it to their friends & family.

4. Competitions
Competitions are one of the ways to engage with new customers. By creating surveys, polls, quizzes, and rewards for the winner you can make it possible. This will not just bring customers but also it will increase brand awareness and sales.

It's completely your call which discount and promotion you wanna use for your business. Make sure you choose discount type according to your business nature, size, product life and most importantly your customer acquisition cost.