I fear for small businesses.
I’ll tell you why.
I’m subscribed to many different “newsletters” and email lists across a broad range of products and services. I do this because I like to see how companies handle their email marketing.
Because I’m getting this broad view, I get to see trends that transcend category. And lately, there’s a trend brewing that concerns me.
Discounts, sales, and specials.
My inbox has veritably been screaming at me SALE! SALE! SALE! BUY ME NOW! NO TIME TO WASTE! DEEPEST DISCOUNTS YET!
And not only has the intensity increased, but so has the frequency and the percentage off.
They started, a few months ago with 10% off. Then it crept up to 12%…15%…and now 20% off.
I weep for them.
Despite the fact that we keep hearing that the economy is still growing strong (enough that the Fed is determined to keep raising interest rates) these small businesses are feeling the pinch. Wallets are tightening because of the rise in basic necessities. With a dip in sales volume, they’re dipping into the only trick they know. Have a “sale.”
There are problems with this approach.
First, a sale does not increase market demand. It only prompts some buyers into buying sooner than they were going to anyway. (Only, at full price.)
Second, repeated and frequent sales damage a brand. It trains customers to wait for a sale. Once a brand falls down this hole it’s a long and painful road to climb out, if they even can.
So, what’s to be done?
You won’t like to answer. Nobody likes the answer. I know this because it’s the same thing Doctors tell their patients every day.
Diet and exercise.
In marketing, we call this Brand Building.
It’s like diet and exercise because it takes time and you don’t see the results right away. But stick to it and your business’s health will get stronger and stronger.
Stick to it and you’ll never have to say the word “sale” ever again.
– Zac Smith, VC
