Small Business Software

Contains a wealth of information and resources for small business owners and entrepeneurs.

Learn more…

Featured Items


Free Website Content

Discounting Tips

Tips for Discounting
By Sharon Housley


Discounting is a tried and true way to attract business, both satisfying your customers and increasing your profits. However, there is more of a science to discounting than one might initially think. Understanding this art is critical to offering the most successful discounts and obtaining optimal results.

Advertising Your Discount

Discounting is all about perception; while $5 and 20% off a $25 item may mean the same thing, presenting your discount in one of these manners over the other can significantly affect your sales. In order to optimize sales, you must, of course, consider the consumer. Psychology tells us that, in terms of discounting, larger numbers are better; the greater the number people see, the more they feel that they are saving. Therefore, choose the largest figure when deciding whether to advertise your discount as a dollar or percent value.

Another area where the consumer's perception is of great importance is that of the actual price of the discounted item. Odd value pricing is a very effective way to consider this factor; when consumers read that an item is priced at $19.99, they are inclined to react subconsciously to the first numbers they see, and therefore unconsciously round the price down to the next monetary unit. This technique is especially effective when an item or service is priced just below a multiple of ten.

There are still other factors to consider in presenting a discount to the customer. While coupon codes may seem like an appealing way to increase sales, providing a coupon code box at online checkout may leave those without a discount feeling left out. Additionally, many consumers search for active coupon codes for a company from which they already intend to purchase, or for a product they already wish to buy. Therefore, coupon codes have the potential to hurt your profits by providing discounts on items for which customers might have paid full price. It is therefore wise to reconsider the role of coupon codes in your discounting strategies.


Discounting is all about now. While it may be tempting to offer frequent discounts to increase sales, excessive discounts may actually harm your sales. If you always have a discount available, consumers will expect you to have discounts at all times, and may therefore delay purchasing, making it less likely that they will make a purchase at all. If you offer discounts with less frequency, customers will be more likely to feel a sense of urgency and to be compelled to take advantage of discounts in the moment.

Running the same discount for a long period of time can have the same effect as running more short-lived discounts with great frequency; even if you do not offer discounts often, a discount that remains active for a long time will cause many consumers to postpone purchasing, and therefore makes them more likely to forget about your discount and forgo spending. Therefore, it is advisable to set reasonably short lifespans for your discounts.


Retail stores often reduce the price of several items, called "loss leaders," below their market costs in order to encourage people to come to their store. While they may lose money through the discount on the advertised products, the goal of this strategy is to incite the consumer, once in the store, to buy other things as well. However, despite the popularity and success of this strategy, a loss leader may not work online in the same way it does in retail unless your product line is very broad.

Although discounts can improve your sales and profits, they alone may not be as helpful as one might hope, especially if a discount is less successful than expected. Therefore, it is important to balance discounts with upsells. By encouraging consumers to purchase additional items or upgrades in addition to running discounts, you will be best able to enhance your profits by employing multiple marketing strategies and avoiding placing all of your eggs in the proverbial basket.

While not quite a discount, offering freeware is another popular marketing strategy, as it is great way to allow the customer to test your product or service before purchasing it. However, poorly designed freeware may hurt rather than help your sales. If sufficiently invasive restrictions are not placed on your freeware, customers may find that your freeware is an adequate substitute for your paid software, and therefore may refrain from purchasing. Offering freeware in the form of free trials can also be unwise; savvy consumers may know how to avoid restrictions placed on downloads, potentially making their restricted free trials infinite. It is best to consider these factors when engineering restrictions on your freeware, and to do so carefully and in a way that will compel your customers to purchase your complete software.

Clearly, much can be said about the art of discounting. However, the most important consideration is always the customer. When in doubt, always consider the customer's perspective, and how they might respond or react to a particular deal.

About the Author:
Sharon Housley manages marketing for NotePage, Inc. , FeedForAll software for creating, editing, publishing RSS feeds and podcasts. In addition Sharon manages marketing for RecordForAll audio recording and editing software.


This article may be used freely in opt-in publications and websites, provided that the resource box is included and the links are active. A courtesy copy of the issue or a link to any online posting would be greatly appreciated send an email to .

Additional articles available for publication available at




  |   RSS Specifications   |     Podcasting Software   |   Web Logos   | Stock Photos  | Web Templates | Business Cards | Wild Animal Gifts
Copyright (c) 2003-2012 NotePage, Inc. All rights reserved. Google