The Two Sides of Discounting

Discounting is a tricky thing, but when done correctly, it can be a smart and effective tool for your business. In the August 2012 issue of the International SPA Association’s (ISPA) Pulse magazine, ISPA members said there are pros and cons to discounting. Consider different point-of-views before you dive into the world of discounting.

Part of Business

Even if a prospective customer doesn’t use a discount, you are still gaining exposure and publicity for your brand when someone sees your offer. With this promotion, you may reach an entirely new market of potential clients who have never heard of your company. Additionally, when used in most retail settings, providing a discount can help move a product off the shelf quickly, allowing you to get new product on the shelves.

Most spas, in one way or another, are already discounting. From the 2013 ISPA U.S. Spa Industry Study, 51 percent of spas offer a special discount or promotion to their social media audience, 47 percent of spas offer a loyalty program to reward repeat customers, and 27 percent of spas utilize a promotion on an online deal website to entice new customers. 

Loyalty May Be Lost

When discounting strategies are used, you could compromise loyalty among your customer base. This is specifically the case when discounts are offered on a regular basis. Routine discounts train the customer to only visit when a deal is offered, and will expect the deal to be offered regularly. The discount also implies that you are decreasing the value of your service. To avoid this misperception, product or service add-ons are better to offer than a straight discount.

History May Not Repeat Itself

Whether you decide to discount or not, keep in mind that using the same retail strategies year after year will not always equal to the same success as in the past. Peter Sheahan, keynote speaker at the 2012 ISPA Conference & Expo, said during the General Session, “When you think of the spa industry, you have had lots of success. That success is the single biggest barrier when trying to go to the next level, because what you have done in the past has worked. What got us here today is not what is going to get us to where we need to get to tomorrow. Do you have the courage to change and not go back to the same old strategies?”