RETHINK

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What’s the difference between discounting and rewards?

 

Defining Discount: a reduction made from the gross amount or value of something.

Related Words: giveback, kickback, rebate; dent, depreciation, decline, diminishment, drop, fall, loss.

Is discounting, depreciating or diminishing the value of what we offer in the veterinary profession something we want to associate ourselves with or is there a better way? Is there a better way to communicate value with clients yet esteem the complete and total value of veterinary medicine without diminishing it at the same time?

Meet REWARDS:

Reward: a stimulus administered to an organism following a correct or desired response that increases the probability of occurrence of the response.

Related Words: bonus, premium; jackpot, treasure trove; award, decoration, distinction, honor, prize, trophy; gratuity, tip; reimburse, applaud, compliment, hail, praise, salute.  Those are great words to be associated with!

Yes, discounting and rewards share something in common, and that is the fact that the ticket is being reduced at some point.  However, we feel it’s much better to reward customers for paying full price, incentivize future visitation and increase your ROI at the same time.

The Math:

If get a 10% discount on a $1000 bill I end up paying $900 dollars that day and have no financial incentive to return…that is until I get offered the next discount.

If I get a 10% cash back reward (stored value)  on a bill for $1000, I end up paying $1000 and have a $100 reason to come back again in the future.  If I spend $500 on the second visit, the merchant collected a total of $1400 out of a possible $1500. In that example the merchant collected 93.33% of the retail total on two visits. Offering cash back rewards will always be more beneficial to the merchant compared to discounting, produce higher ROI and deliver a higher perception of value to the client at the same time. In addition, it is impossible to have 100% redemption all the time so that increases ROI as well.  You can see real numbers and case studies in our webinar so sign up today!

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