Sir: The recent research from IPM confirmed our fear that many UK retailers are still relying on heavy discounting strategies that fail to pay off (‘Value-added promos dwarfed by ‘slash-and-burn’ discount spend,’ The Grocer, 22 February, p6).

While discounting in moderation can pay for itself in exposure, high-street stores are making obscene cuts of up to 80%+, which is only good for attracting bargain-hunters with no brand loyalty. Offering blanket rock-bottom prices is a blunt, inflexible tool, offering everyone the same saving whether they want it or need it.

What’s required is an alternative to dumb discounting - and that’s smart rewards: dynamic offers that aren’t simply pushed out by you, they’re pulled down by your customers. It’s absurd that businesses continue to take enormous risks in guessing which offers will gain the most traction. All they have to do is ask customers “what would you like to see?”, and detailed customer intelligence is only a click away. Giving a customer a deal when they ask for it makes them far more likely to purchase when the deal goes live, resulting in a vastly improved conversion rate.

Adding other elements such as dynamic pricing can make rewards even smarter. If your offers improve - and keep improving - as and when shoppers exhibit behaviour such as ongoing loyalty, sharing on social media or introducing new customers, - you can incentivise engagement that’s highly beneficial to your business, while selling products at realistic prices, which still achieve real cut-through.

Gideon Lask, CEO and founder of Buyapowa

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