I write about the things that matter to me. All opinions are my own.

Search This Blog

Saturday, January 12, 2013

The Right Discount Dynamic To Preserve Brand Equity


It's the classic branding problem:

  • The better your image, the better your brand equity - the higher the margin between your stuff and a commodity. 
  • But if your merchandise isn't moving, offering discounts is a short-term fix that leaves you leaking brand equity like the Titanic.

So how do you offer a markdown without seeming "cheap?" Target the method of discount to your audience. As follows:

  • Premium: Distribute fancy print cards, in person, to the luxury shopper who has already paid full price; provide fee-based credit card with discounts to loyalty club.
  • Semi-Premium: Mail "specials" to members of your loyalty club; provide no-fee loyalty card enrollment program
  • Mass market: Leak promo code virally, online; offer app-based discounts
  • Neighborhood market: Print coupons in the Sunday paper and/or neighborhood newsletters; tear-offs in the local Starbucks

The bottom line: Discounts are not inherently deadly to your brand. But thoughtless discounting is. If you customize the discount in a way that looks well-thought out and even exclusive - not desperate - your brand desirability may even increase.

In addition, as Killian Branding points out, if you have to do a discount, "avoid getting into the cycle of frequent deep discounts" and "if you are in it, get out." It's one thing to generate excitement with a promo. It's another to live your life waving people down from the clearance aisle.