Discount Pricing Strategies and Jewelry MarketingLaryssa
In episode #139 of the Joy Joya Jewelry Marketing Podcast, I discuss the role of a discount pricing strategy in jewelry marketing. Should you be offering discounts and promotions? If so, how much of a discount should you offer? And how often should you be offering discounts? Listen to better understand how to handle special offers and promos for your jewelry brand. Check out the transcript of the episode below.
Hi, I’m your host Laryssa Wirstiuk. Through this podcast I aim to empower and inspire jewelry entrepreneurs and innovators so they can thrive by doing what they love. I’m passionate about digital marketing for jewelry brands, and I’m excited to share my passion with you. This is Episode 139. And today I’m going to discuss the role of a discount pricing strategy in jewelry marketing. Should you be offering discounts and promotions? If so, how much of a discount should you offer? And how often should you be offering discounts? Listen to this episode to better understand how to handle special offers and promos.
But before we get to today’s episode, I want to share some marketing related news and insights from the past week that caught my attention. So first, an article from the Guardian is all about how recent changes to Instagram are frustrating, creative people, especially those who really make a living from the platform. So they’re angry about this shift toward TikTok style videos. Because as you know, video is time consuming. It can have a steeper learning curve, especially if it doesn’t come naturally to you. And it can be a challenge for people who are self conscious in front of the camera. I know I have a lot of clients who just they don’t feel comfortable being in front of video and I get that.
So Instagram has been showing this one creative who’s a hobbyist photographer and self proclaimed sunrise Hunter, Sam biding, he conducted an experiment and he found that on Instagram, a total of 5595 people saw this one post that he took of a lavender farm, whereas the same picture on Twitter was seen by 5611 people, even though he has 333 followers on Twitter, and 11,000 followers on Instagram. So it’s just like a very limited comparison. But it’s kind of goes to show that Instagram is really starting to limit reach of people who have a big following so I can definitely understand why those are getting frustrated. Are you feeling this hit? Are you kind of not feeling comfortable about making the shift to video? I’d love to hear your thoughts about this. It’s definitely a hot topic in social media marketing today.
Another article from InStore mag was all about the gems and jewelry buying behavior survey of 2021, which aims to help retailers know what to purchase for next year and beyond. What are consumers looking for? So it’s a consumer category and preference roadmap. So what did the findings show? Well, the number one thing that consumers are looking for is quality in a piece of jewelry. Price actually ranked number four, and this is all when consumers were asked what is most important to them. 31% chose quality. 23% said design and 17% wanted uniqueness in a piece of jewelry that they purchase when it comes to design uniqueness. 15% wanted something that was really fashionable and avant garde, while 8% wanted something organic floral and fauna. I’m not going to dive into all the statistics in this episode, but I thought this was a really interesting study that shows consumer preferences today.
And then finally an article from Vogue. Not so much marketing related but still was super interesting to me was all about a new exhibition celebrating black jewelry designers coming to New York City in partnership with Sotheby’s. It’s the first of its kind selling exhibition called Brilliant and Black: A Jewelry Renaissance. It’s opening on September 17, and it will showcase the work of 21 black designers from across the US and Europe. It will have roughly 60 pieces with prices starting at $1500. At the high end of this scale is actually a million dollar ring that was custom made for this occasion by Maggie Simpkins. If it sells it will set a record for the most expensive jewel by a black designer sold at a major global auction house. Will you be tuning into this exhibition? I’m kind of excited to see what happens and to see the pieces that will be featured in the show.
If you want to get the links to the articles I share in this segment of the podcast, you can sign up for my email newsletter by visiting joyjoya.com/signup, and you’ll get a digest with the links whenever new episode drops.
Okay let’s get to it. Let’s talk all about discount pricing strategy and how it relates to jewelry marketing. Is a discount strategy right for you as a jewelry brand? You’ve definitely asked yourself this question, especially if you’re a fine jewelry brand. Will discounting devalue your products and your reputation as a brand? Will discounting just train your customers to wait for your next sale? So you never sell anything full price and only make sales around times that you offer special promotions.
You know what that’s like firsthand. If you shop at CVS or Bed Bath and Beyond, you probably know to never pay anything full price, unless you have a coupon, right? You’ve been trained to wait for that next coupon, which hopefully is right around the corner. You probably don’t want to be that brand in the jewelry space. So when is discounting right for your brand? First, so there’s no unfortunately, no magical formula, or answer for this. It’s a very individual decision that you will have to make based on your brand identity, the story you’re telling about your brand, the reputation you want to have, the types of customers you’re trying to target, the platforms that you’re using to market your brand. There are so many different varial variables involved in this. But I want to talk a little bit about both the pros and the cons. So you can kind of weigh the two, and decide if this is something that’s right for you.
So some pros, discounting can create a sense of urgency. So it can be around a limited time offer, or maybe around a product that’s only going to be available and add a special price for a certain period of time. And it definitely encourages people who have been kind of sitting around waiting for the right time, waiting for motivation to make the purchase that they have been thinking about. Another pro is that a discounting strategy could potentially help you acquire new customers. If it’s implemented thoughtfully, and in line with your brand values and your brand identity, it could help you gain new email subscribers. Also, if you have a welcome discount, like for example, if you have an incentive that if someone signs up for your welcome email, they get 10 or 15% off. A lot of customers don’t even end up taking advantage of that welcome discount. I was trying to find specific statistics around this, I couldn’t find a good number. But there’s a lot of anecdotal evidence from jewelry and fashion brands that customers will sign up for that email just to have that discount. And then maybe not take advantage of it or even not right away. Because they are new to the brand. They’ve just started their buyer’s journey, they kind of want to like, learn more about the products first, they’re not ready to make that purchase. So you’re putting that discount out there. But maybe some people won’t even take advantage of it.
The pro is that you’ve gained those email subscribers, it also shouldn’t cost you very much, especially if you are pricing your products correctly. And you’re offering the right discount. After you’ve done all the math, you plug in, you plug in all the numbers, you know, you shouldn’t be losing a ton of money with whatever discount you’re offering. And another pro is that could potentially help you move old or outdated inventory, or help you generate sales when you’re in a slump.
Now that you know all the pros, what are some of the cons of doing a discount pricing strategy? It could potentially devalue your brand. And as I mentioned before, train your customers to wait for a discount. But not necessarily. If you’re doing a great job creating desire among your target customers and making awesome products, then your customers won’t be trained to wait for sales because they’ll want to buy what you have now. And they simply cannot wait for something to go on sale, or potentially be out of stock later. You may need to work harder on customer retention strategies to ensure that your customers come back to you again and again. And that they’re not just chasing whatever discount they can find. So you don’t want those like one and done customers who are just looking for discounts. You may be potentially wasting money on marketing that’s attracting those non ideal customers, those people I just mentioned, those people just looking for a deal that’s potentially possible. And finally, another con is that it might make you seem like you have a lack of confidence as a brand. Like you can’t just stand on your own brand identity and the beauty and value of your products that you need to to offer a discount in order to make up for those things.
So what are some types of discounts that you can potentially implement in a discount pricing strategy? There’s a percentage discount which is like 10% 15% off, one product off a total purchase, etc. There’s a dollar amount discount, so maybe it’s $10 off of first purchase. $20 off $50 off whatever that may be. There’s free shipping. If you don’t normally offer free shipping, that could be an incentive or special promotion that you offer to customers. There’s the gift with purchase promotions. So I’ve seen people send like free jewelry polish, or free jewelry cleaners, or maybe even like a small pair of silver earrings, something that isn’t super expensive, but really creates value for the customer. There are threshold promotions, these are really great for businesses with low profit margins. So that means if a customer buys a certain dollar amount worth of product, like let’s say they spend $1,000, then they will get X amount off their purchase. But it only applies to people who spend a certain amount of money or buy a certain number of products. And then there’s also bundling. So maybe you have like a jewelry set, like a pair of earrings and a necklace that go together. And if a customer buys them together as a bundle, then they will get a special discount on those two items together as opposed to buying them separately. What are some commonly seen scenarios or situations where discounts are offered where it might feel appropriate to offer your customers a discount? Definitely, there’s the welcome discount, which is kind of ubiquitous in e commerce, where you offer a certain percentage or dollar amount off in exchange for an email signup. So you have to decide how much is an email address worth to you. If you are engaging in email marketing effectively, then an email address could potentially be worth its weight in gold, and certainly the price of potentially losing some money to a welcome discount code. So you have to kind of weigh the value of a new subscriber.
Just some stats for you. According to the 2018 inmar shopper behavior study, 39% of consumers bought a product sooner than planned because of a coupon. So offering that welcome email might shorten that buyers journey, might make someone purchase more rapidly than they would have otherwise. And 30% of consumers bought more than they would have otherwise because of a coupon. So they may increase the total cost a total amount of money per order if they happen to have a discount code. So another scenario where you may offer some kind of discount or promotion. This is actually an ongoing one is if you have a discount for a special population like teachers, veterans, seniors or students, and one reason why a brand might choose to do this type of discount is because it reflects their brand values. So maybe they are all about supporting educators, maybe that’s something that’s in their brand DNA, then it would make a lot of sense to offer that special discount to that special population, it can help you showcase what you stand for as a brand. Another scenario would be to reward only your most loyal customers. So to create a loyalty program, and a community of those VIP customers, the more they purchase, the more perks they get, the more they get off off their order, you could potentially offer discounts for product or collection pre orders. So if you want to generate some buzz around some new inventory that you’re releasing, or even to get pre orders so that you know how much to create or to manufacture offering an early bird discount for people who show that initial interest can be very common as well.
Kind of coinciding with that welcome email discount, there’s also potentially an abandoned cart discount. So if you are able to track who is abandoning their cart, and you have an email automation in place to target those people, and remind them that they left things behind in their cart, you can send a small discount to kind of sweeten the deal and incentivize them to complete the purchase. There are also refer friend discount programs. So the best way to acquire new customers is to get them from people who already love you and are so excited to share their love for your brand that they tell their friends, those are worth their weight in gold. So if you potentially offer a discount for customers who refer friends to you to new purchases, that could be part of your discount pricing strategy. If you work with influencers or brand ambassadors, you may have specific discount codes that you give those people to share with their followers. That’s a great way to help you track the return on investment of those campaigns because you can track the sales that come directly through that influencer or brand ambassador with that code.
You could potentially also do a flash sale. So instead of training your customers to wait for certain times of year, when they know that you’re going to have a sale like around Black Friday, or the holidays or Labor Day or whatever that may be, surprise them with a flash sale, don’t do that very often. But then it also makes your VIP email subscribers feel like they have access to something exclusive, because they’ll likely be the first to know about this flash sale. Of course, you can offer discounts around holidays, Black Friday, Cyber Monday, those are the most obvious ones. But not all jewelry brands follow that strategy. In fact, I’ve seen some kind of go totally opposite direction, not offer that typical Black Friday and Cyber Monday discount, and instead choose a totally different time of year to do that discounting. Because there’s less competition, there’s less noise, they’re not up against all these other jewelry brands that are doing their holiday promotions. So that’s another option.
And finally, you can do something cause related and this is really great if you have certain brand values. If you support a certain cause or nonprofit organization, is there a certain time of year where the awareness around that cause is really high? Like is there a month dedicated to it, perhaps you can offer a special discount to raise awareness of that cause. So once you’ve figured out if discounting is right for your brand, and you’ve decided on the types of discounts you want to offer and when you want to effectively incorporate that discount into your messaging and your marketing. So how can you do that?
First, you definitely want to have a goal in mind, don’t just discount willy nilly whenever you feel like it and not know what you hope to achieve from offering that discount. So whether it’s to raise brand awareness, gain new email subscribers, move some old inventory, get more customer referrals, whatever that may be, have a set goal around your discounting strategy. Next, think about who you’ll want to target with your discount. Is it only like a segment of your customers, the most loyal ones? Is it people who are new to your brand? Whatever that may be, really think about who this target customer is.
Considering communicate any restrictions that may apply to your discount. So first definitely know what they are. Are you excluding certain products? Is the discount only limited to a certain time? Know what those are and make sure they are very clearly communicated. Because you don’t want customers to get upset with you or to argue with you about your discounts.
Consider the timing of your discount. How much time will you need to prepare? How much buzz will you want to generate around your discount? Is it a flash sale? Do you need to create new creative assets around it like photos, graphics, etc? And then where will you want to communicate this sale? Is it email only? Will you be sharing it on social media? Will it be in an advertisement? Wherever that is, get clear on how you want to communicate the sale to your customers. If you’re doing a welcome email, discount or other automatic discount, make sure that the language and calls to action are crystal clear. So if you want someone to sign up for your emails, make sure in that call to action where the email signup is someone knows that they’ll be getting a welcome discount or whatever else they can expect from signing up for emails. Emphasize if it’s a limited time offer emphasize that time based restriction to customers. Again, you’d be surprised if you’re not making something crystal clear someone may miss it or ignore it.
You also might want to try testing your offers like AB testing. So if you have an email pop up on your website, for example, you may want to AB test two different kinds of offers. Maybe some customers who visit your website are randomly delivered like $1 off offer whereas others are delivered a percentage off offer and then you can see which one is more effective in helping you get new email subscribers. And of course Finally, you’ll want to track and review your results and continue making changes based on the data that you get from your discount pricing strategy. So those are all my tips. Are you discounting your jewelry products? Do you only have certain type times of year when you do it? Are there only certain products that ever go on sale?
Transcribed by https://otter.ai