Discount containment

When creating a discount, having a proper discount containment strategy is essential.

If there is one thing that all customers have in common, it’d be their love for discounts. To your customers, nothing beats the joy of getting your products at a discounted price. If used properly, discounts don’t only make your customers happy but also benefit your business in so many ways.


When you make a discount, you have an opportunity to gain new customers, please existing ones as well as get rid of some slow-selling products. To get the most out of your discounts and make them as profitable to your business as possible, a good discount containment strategy must be used.

When you lower your price at a discount, you’re also lowering your traditional profit margins and increasing your risk. Going from selling at a small profit margin to selling at a loss can spell disaster for your business.

Important Considerations

When creating a containment strategy for your discounts, you should always keep the following things in mind. By doing so, you’re not only lowering your risk but also making the entire process much easier.

Setting a target for your discount

Discounts that don’t have a target from the very beginning are a recipe for failure. If you don’t have a target to achieve by having discounted prices, you will probably end up losing money. You can also find out -after the discount is over- that it didn’t do what you originally had in mind. Before you create a discount, ask yourself why you are doing it. Are you trying to get rid of some slow-selling products? Are you trying to get customers to try more of your products? Is this a part of a seasonal sale? Are you trying to penetrate a new market? Knowing the answer before you start can help you pick a discount strategy that’ll work for your business. You’ll also be able to develop a successful price containment strategy that will protect you from loses.

Choosing the right discount strategy

To most people, all discounts are basically the same thing, which is “lower prices”. However, this is as far from the truth as it gets. There are plenty of discount strategies out there and choosing the right one is essential for success. Choosing the right discount strategy is half the work. The other half is the prices research before the discount and the results analysis after it’s over. The answer to which discount strategy should I choose question lies in your business itself. Your industry, as well as your target customers, have a direct influence on choosing a discount strategy.

Discount Strategies

There are many discount strategies out there. The following two, however, are tried-and-tested methods that are proven to work, especially for retailers. You can choose one of them based on the goals that you have set for your discount.

Buy one, get one free

This is one of the most popular discount strategies for a reason, which is the fact that everyone understands “free”. People might not be that good when it comes to calculating sales percentages. They are exceptionally good however at understanding the value of getting something for free. An effective discount containment strategy to use with a buy one, get one free offer is to pair different items. The item that people pay for has a high-profit margin while the freebie is a cheap item that isn’t selling well. By doing so, you’ll get rid of an item that isn’t selling well without taking a loss.

The bundle

Bundled items being sold together is an offer that most people find hard to resist. In a bundle sale, you offer people multiple related items that are being sold together for a discounted price. You can use this strategy to sell lots of your best sellers as well as the items that aren’t selling well. Most people will buy the bundle since it has some of the product they’re already familiar with. Another advantage of the bundle offer is that you can get people to try products different from the ones that they are already used to. Without the bundle offer, they might have been hesitant to try these products. To make sure that you don’t end up losing money on your bundle sale, make sure to include products with different profit margins. By doing so, you’ll have different products in the bundle working together to make it up for the discounted price, so you end up with a fair margin.

How can Sniffie help?

When creating a discount, having a proper discount containment strategy is essential. By having a good strategy in place, you’ll be sure that your discount ends up achieving its goals without you ending up losing money. By helping you find out about the prices of your competitors, Sniffie helps you create a solid discount strategy that pleases your customers without hurting your business. Check out Sniffie’s features and our service page to find out how Sniffie can help.

Want to learn more about pricing?

Are you keen to learn more about pricing? Head to our Pricing Academy, from there you can find our latest articles about pricing and other free resources related to pricing, be sure to check them out!

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