Why Your Startup Shouldn't Run Sales

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So, you’ve decided to start your own business, and I’m sure running a presale special has crossed your mind! Running sales as a startup can have its pros and cons—which is why many startups begin their business by starting a sale to get new customers in the door! But there are some pretty important reasons NOT to run sales right out of the gate.

1. Running a sale may affect your business’ position in the market

When your business opens, you are establishing your position in the market, and it is so important to position yourself exactly where you believe you belong. Part of your market positioning will be determined by the pricing of your product or service. Your initial pricing will setup how the public sees and values your products.

If you run a sale, the public will perceive your products to be worth that sale price and not the full price tag. This will make them less inclined to purchase your product at full price. If your product is a quality, valuable product they will see the value and be happy to pay the price you’ve set.

2. Future customers may refrain from purchasing unless you’re running a sale

Your marketing techniques and word of mouth should be enough to bring in new customers as more people realize what a fantastic business you run! You don’t want your customers and potential customers expecting your services or products to be at a lower price than they are actually worth simply because you ran a sale to celebrate the opening of your business.

Here’s the thing: those very first customers are the most likely to be your brand advocates because the very beginning of your company is when you’ll have the time and the resources to give them the most attention. When you start out by giving them a reduced price, they likely won’t want to buy again if the price is higher, so you will lose out on many important sales throughout the lifetime of your relationship with those customers.

3. It may inhibit your startup’s profitability

The money your business makes in its first year is, arguably, the most important money you’ll ever make. The revenue you bring in (or lack thereof) will affect your ability to ramp up your marketing efforts, and as a result, scale.

You’ll want to maximize the profitability of your startup during its first year to ensure you can make it to the next year and keep growing from there. While it is enticing to run a sale to get more customers to purchase from you, this will not only affect their perception of your pricing moving forward, but also your ability to reinvest in the business during a crucial time.

A new business always has a limited audience as your marketing budget is smaller and your brand isn’t well recognized yet. Because of this, running a sale won’t do much to bring in a boatload more customers than you would if you didn’t run the sale.

Conclusion

If you’re looking for some tips for startup discounts, you might want to stop. While they seem like a good idea upfront, they can actually be more harmful to your startup than you think. They could negatively impact your market position. Running a sale may decrease the value of your products or services in your customers’ eyes as well.

Lastly, it can inhibit your startup’s profitability during a very crucial time for your growth. So, when you’re opening your startup and introducing it to the market, refrain from running a sale. Maximize your profits and establish your position in the market before you start discounting anything. Only then will you be on the fast track to strong business growth.


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Meet the Author: Holly Hickman

Holly Hickman is a Kennesaw State University graduate who has worked with a myriad of clients in e-commerce, Saas, hospitality, non-profits, and more to grow their companies with smart digital marketing strategy. She specializes in content marketing and has a keen eye for language and messaging while focusing heavily on SEO.  

Holly is also passionate about health and fitness spending her time outside the office as a full-time bikini competitor and competitive powerlifter. She is also the Founder and CEO of HollyLolly, an athletic apparel company helping women feel bad-ass and confident in the gym whether they’ve been an athlete all their life or are just beginning their fitness journey. You can connect with her on Instagram @holly_hickman. 


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