Sometimes, businesses reach a stall point. Your products are not selling like you want to, and you decide to take some action. You have to ignite things again for your company. So, you conclude that you need to generate demand for your products and create interest in consumers. The way to do this is by applying promotional pricing.      

Promotional pricing is a pricing method where a company temporarily reduces the prices of its products to achieve higher demand and make more sales. But wait a minute, I know what you are thinking. “That sounds like traditional promotions.” Here is the catch: What makes promotional pricing different is creating a sense of urgency for consumers. That is why it needs to have a short time frame, and that is the motive that makes it successful and distinctive.     

But, you cannot do it often because it loses its magic touch. If you do it many times, customers will expect low prices continuously and will not buy products from you. A study by SheerID proved this. 55% of the marketers said that the number one reason for not achieving higher conversion rates was consumer fatigue or conditioning to discounts. Promotional pricing is a popular strategy among sellers. According to SheerID, 80% of marketers indicated that promotions play a significant role in customer acquisition strategies.     

Promotional pricing is used often on these four occasions:     

• Create buzz around a new product     
• Increase sales     
• Getting rid of old products     
• Rewarding loyal customers

Promotional pricing has many advantages, and the first one is an increase in sales. That is one of the biggest reasons that companies use promotional pricing. Most customers are price-orientated, and most of them make a purchase when they see the discount sign. In the long, retailers expect that customers and sales will continue to grow when promotional discounts expire.    

The second one is revenue growth. Of course, this occurs because there is an increase in sales. But you have to consider this. That increase in revenue happens for a short period, and most companies go with this strategy when they are struggling to meet financial projections or cover some expenses. Companies expect that once discounts are over, sales will continue to increase.    

Another benefit is that promotional pricing helps you reduce inventory on old products that do not sell well. The new stock takes advantage of this because it takes the spot from the old one. On top of that, you will make revenue on products that your company thought were not going to sell.       

The last benefit is customer attraction. Dropping your prices for a short time encourages customers unfamiliar with your brand to get to know you. Take advantage of this to gain new buyers for your company. Also, many customers are attracted to promotions and only buy when they happen.     

Price monitoring programs like PriceTweakers offer your company the best market insights and its competitors. Never be behind the competition, analyze what they are doing, and increase your sales and margins. On top of that, PriceTweakers offers you different pricing strategies to boost your sales and margins. Are you interested? Follow us for more information.     

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