The companies that are in the business of manufacturing physical products use discounts is one of the techniques and strategies to encourage customer loyalty among existing customers already use their products and they also use it as a strategy to attract new and prospective customers. Discounts are used by organizations and they are structured differently by different organizations for example, an organization can decide to reduce the amount of money that a customer pays for a single unit by a calculated percentage or the organization can decide to make it possible to purchase more units with the amount of money that they would use to purchase one unit. Another form of discounts that they are companies who are in the business of producing physical and tangible goods use to encourage customer loyalty among existing customers and to also attract prospective customers is rebates. Rebates a form of discounts whereby the customers of a specific brand get to be refunded by the producers of the physical and tangible goods when the purchase goods worth a certain amount of money and exceed the limit that the producers had set. One producers of physical goods and products decide to use rebates on their existing customers and prospective customers, there are a few advantages that come with that decision to use rebates. This article shall seek to discuss some of the advantages that the company producing the tangible goods and products get to experience as a result of using rebates on their customers and prospective customers.
The first advantage that producers of physical and tangible goods get to experience through the use of rebates as a form of discounts on their existing customers is that they get to encourage customer loyalty. The reason this is important is because when the company producing these physical and tangible goods have loyal customers, they get to have more time to respond to activities that their competitors might be doing in order to win over customers who use the specific product class in question.
One other benefit of deciding to use rebates as a form of discounts is that it is very well known for its success rate of converting new and prospective customers into becoming loyal customers of the brand of the specific company in discussion. The management team of this companies that are in the business of producing physical and tangible goods can set a price limit for purchases that if a prospective customer exceeds that amount, the company compensates or refunds the customer a specified amount of money. This works very well in encouraging customers to continue purchasing the products produced by that specific company.