To offer discounted price or not?

[em_coles]

Hi everyone!

I work for a family run e-commerce company. As we're not as well known as the big companies out there, we struggle to gain new customers. Our rate is competitive anyway but I was wondering if it would benefit us to offer a discount for a fixed time or if that would devalue the service we're giving.

We provide a website, hosting, domain management, payment processing, full data back ups and 24/7 support.

We charge from £450 for the creation of a basic shop, a yearly licence fee of £165 and 2%+20p per transaction for the payment gateway fees. I was thinking of waiving the licence fee for the first year. What do you think?

Thanks,
Emma

 

[ecoleman]

You would have to test it yourself. Nobody can really answer that for you.

Personally as somebody who has run an ecommerce business for the past 5 years and who started off knowing very little about the ins and outs, I would want to know that the company I chose to host my business would be around in a few years time.

the fact that you are a small family run business and not very well known could be what is putting people off.
If your business doesn't work out you could end up taking a lot of small businesses with you.

It's for that reason that we develop and host our own site.

 

[em_coles]

Thanks for your input. Maybe you're right and people aren't confident in a smaller company. We've been around since 1998 and we're one of the first complete e-commerce companies around so we've got plenty of experience and have increased in profit every year so we've got confidence in the business, it's just a case of convincing others if that is the issue.

 

[ecoleman]

Maybe you need to market yourselves a bit more. As hosted solutions go, I've only really come across EKM, Shopify, Bluepark, Volution, Actinic and another based in the states but for the life of me I can't remember their name.

I would have thought a business trading since 1998 would have built up a good reputation and word of mouth advertising by now.

 

[wayzgoose]

When I was looking for a hosted solution 3-4 years ago, I checked out an awful lot. Can't say I ever came across you.

 

[blueour]

it would benefit you to offer a discount for a fixed time, and first, you need do some Advertisement.

 

[fisicx]

yes. at least to attract consumers, you need to offer discounted price.

Do this and they will want a discounted price forever more. If you need to offer a discount to attract new clients there is something wrong with your business model.

 

[ecoleman]

I agree with this. However this £450 to create a basic shop is probably what is putting most people off.

Pretty much all of the hosted solutions these days do not require an up front cost.
Their system already provides a basic system with the ability to apply templates or make your own changes.

I would also not want my payments going through somebody else other than a proper payment service provider.

I fear that if they have been in business since 1998 that they have probably fallen behind the competition somewhat.

 

[blueour]

sorry, I don't need. but if you can do some discount for fixed time, it will help more customer know you

 

[obscure]

1. Offering a discount to attract new customers will attract customers who want a discount and who may leave once the discount runs out hopping onto the next special offer.
2. The best form of "advertising" is word of mouth from satisfied customers.

Have you tried offering a referrals program where your current customers get extra hosting time free for each referral that signs up?

 

[Paul_Rosser]

Assuming you are competitively priced then most of the good business books and coaches will tell you never to compete based on price.

You need to focus on what you offer which is better than the competition, which can be something as simple as offering really good customer support.

As Wayzgoose said it could just be that people aren't aware of you, so you may need to spend some money on advertising or SEO.

Ask your existing customers why they use you, what do they like and then advertise based on that.

If you get enquiries from people who then don't sign up, get in touch with them and ask why they didn't use you and if it is the setup price then consider dropping that and increasing the monthly charge.