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This is what you should be doing instead of bleeding profits in the name of discounts (which people no longer even care about)


Experian is a global provider of integrated consumer insight, and according to their latest data, many customers are price indifferent.

Basically, consumers have developed more important factors to consider when assessing a purchase.

The Deal Seekers Report outlines five determinants: Service, Price, Convenience, Environment and Brands, all ranked on relative importance to the top ranked factor.

And guess what? Price ranked second last or last for all identified customer groups. The real shocker is that this was true even amongst those groups most motivated by a deal!

You say price is everything? I beg to differ…

A few months back I sat down with Hezi Leibovich of the Catch Group. I admire his success a lot. I’d sent him an email earlier that week requesting 30 minutes of his time to get his take on our business, GOOD44.com and of course the business model.

Leibovich didn’t actually say that he liked the business one way or the other but what he did say is that he thought e-commerce couldn’t thrive outside a deals environment.

I agreed with everything Leibovich had to say except for that!

Yes, I acknowledge price as a determinant for purchase, but I thought that statement was horribly misguided. I believe customers want what they want and they will use the Internet to access it particularly if it’s the right brand and getting it online is really convenient.

A real life example of consumer price indifference

GOOD44’s journey has only been short. We are a marketplace for specialised brands in the food, health, wellness and beauty categories.

These brands can set up their own shop with ease, get access to and contribute to a community of customers. They are also able to encourage and generate recurring orders through a subscription retail technology.

Upon analysing data from the last six months, we have noticed that over 50 per cent of paying customers on GOOD44 have already transacted three times and above.

Now keep in mind that while we reward loyalty at GOOD44, we very rarely discount.

If not discounts, then what do customers want?

Perhaps the difference is that GOOD44 is a marketplace of great specialised brands and those gravitating to our shops are already fans or customers of these partner products.

So what is it that we offer then? Could it be that service, convenience and the right product selection are in fact the biggest drivers of first sale and ultimately loyalty?

Are customers looking for better prices on line or is it the experience, the ease of shopping, the brand, or even presentation of product information that makes this medium tick?

I say it’s all of the above.

I fully acknowledge that if you orientate your model to price, as Leibovich has done, then you will attract deal hungry customers and they might buy, but clearly, it can’t be stated that discounting as a business model component is a necessary for online success.

In the study of 25,000, Experian established eight categories of customer. 34 per cent fell into the category of Deal Indifferents and another eight per cent in that of Deal Rejectors.

These are the ones to whom price or a huge discount doesn’t mean a thing when shopping. These customers are motivated more by environment, brand and convenience.

Take out of this study what you will but as e-commerce marketers, it means understanding which customer group is which and how to appeal to these groups. Simply sending discounts out is a wasted opportunity to communicate the real value of your products.

Every day I ask myself, and you should to, what else can we do to delight customers?

Blake Hutchison is Founder of GOOD44.com. Blake’s career has been spent in digital environments and with GOOD44 aims to make online easier for specialised brands in the food, health, wellness and beauty segments.