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Welcome / Small Business Advice — Prudent Discounting

Welcome to the Dollar Days Blog!

We’re excited to bring you a combination of original features and commentary on the most useful and thought-provoking small business related content from around the Internet.

Over the next few months, you’ll see us post several stories per week on a variety of topics including:

  • Small Business Advice
  • Small Business Expert Interviews
  • Small Business Profiles
  • Frugal Living Tips

Every Wednesday, we’ll also highlight a Product of the Week — a special item at an extra-low price from the Dollar Days inventory.

small-business-advicePlus, from time to time, we’ll run special Promotions where Blog readers will have a chance to win exciting prizes.

Above all, we want this Blog to be useful to you. We want it to be a lively community that helps entrepreneurs and businesspeople save money, grow their businesses, get inspired and have some fun!

If you have any ideas on how we can make this blog even better, please don’t hesitate to leave a comment or send us an email.

Meanwhile, for this first post, we’d like to highlight a story we found online at BusinessWeek by Steve McKee that highlights the potential downside to discounting.

In recessions like the one we’ve been facing, your customers may be strapped for cash and you’ll be tempted to cut prices to boost sales. But McKee notes that excessive discounting can actually wreck brand value and plunder your profit margins.

So how can discount smartly? McKee suggests limiting discounts to specific time periods or certain customer groups (i.e. students, seniors). Another option, he points out, is to adjust your product mix – carrying lower-priced products but not slashing the prices on your high-end items.

We’d love to hear about your experiences with discounting. How have you used discounts to stimulate sales while protecting your brand and your profits? Or do you have any cautionary tales about the risks of customers who get hooked on discounts and soon refuse to buy anything that’s not on sale? The comment section is officially open for business.

1 comment

1 DebbieNo Gravatar { 09.30.09 at 11:49 am }

One of the best discounts is the first time buyer discount. Provide free-shipping or $5 off of $25 coupon to a first time customer. It’s worth breaking even or taking a loss on a first purchase to gain a new customer. You’ll need your CRM solution in place first since you’ll want to persuade that customer to return to your store.

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