With Labor Day right around the corner I want to address discounts.
There are pro’s and con’s…in this article I plan to address only a few
of each that would influence me one direction or the other. There are
LOADS of reasons for doing them, and not, but for the sake of time
(because I’ve got John Carter’s launch to manage and about a
dozen other things) I’m going to only address a few that would push
me towards or against, and then I’ll give my final conclusion…
So let’s talk about ‘discounts’ shall we? 🙂
First, I DO want to hear your thoughts in the comment section…it’s OPEN 🙂
What I’ll do is list a PRO…and it’s CON.
1. Pro: Running a major discount brings in a TON of buyers and pumps
up sales numbers! Nothing better then hitting a huge sales goal while
reaching customers who were either on the fence, or never really
interested at all!
1. Con: You’ve now front loaded your sales numbers for a potential
record weekend, month, quarter, with badly trained people. These
are now customers who’ve you trained to expect a major discount on
ANYTHING/EVERYTHING you sell. In my experience with more effort
in your funnels, your external advertising, and affiliate deals could
have been montized MUCH better!
Let’s think about that…while you think here’s a funny GIF:
OK focus…that literally had nothing to do with the article, but it’s funny
and we all need a laugh 🙂
2. Pro: You’ve now filled up your list with buyers, even at a low level,
and buyers on your list is a GREAT THING! With buyers on the list
you’ve already gained their trust. They want your product bad enough
that they pulled out a credit card and purchased…NICE!
2. Con: You’ve trained to expect a major discount and (in my experience)
have a MUCH lower chance of buying anything again, or at a fair market
value rate. Customers are smart and once you train them to see you’re
willing to give away the farm…they’re going to expect the farm…
AT YOUR EXPENSE!
Another funny gif? Nah…here’s number 3
3. Pro: You’ve exposed your quality products to a much larger audience
then you ever have, or could have before, in such a short period of time!
Your product is awesome, we all know that…and now thanks to the
discount a HUGE number of people know that and can experience that
3. Con: Congrats…You’ve watered your product down. When you think
of awesome and quality suits, do you think of Brooks Brothers or
Joseph A Banks? Exactly. No matter how awesome the product is people
will equate it with discount.
So do you agree? Did I miss something?
On point, Brad. About the only thing you don’t mention directly (but cover indirectly anyway) is that there are buyers at all kinds of points on the demand curve and the trick is to figure out how to get as many as possible for as little work/effort as possible. But i tend to look at this stuff more like an economist than marketer anyway.
Well said Skip…VERY well said.
I think Nordstrom for the suit… and John Carter for the affiliate launch…
I hope you and everyone else agrees on John’s launch at least! I know some pretty fancy people!! LOL
We have tested it again and again and again:
As cheesy as it is, discounts (especially “limited time sales”) work!
I’m not a big fan of discounts and cheesy “timers”, but I won’t fight the data.
In our businesses we test, measure and track everything, and we do whatever the customer wants. If we get TWICE the sales when giving a 20% discount, we’ll do it.
And I take “running a business by the numbers” to an extreme:
If split testing would show us that a PINK website would convert best, I’ll color the website pink.
What do you think why the Rockwell Trading eBook landing page is so “ugly”?
I have tested 63 variations of that page, and THIS one converts best.
We are running new split tests at least once a month to ensure we still have the best converting pages.
Just my 2 cents 🙂
The data should always drive your business…VERY TRUE! It’s also an interesting analysis of the LONG TERM effect on a product. Have you ever run tests on products discounted a few times over? What about timing between discounts? Would be another interesting thing to read into my friend! Also…We know you love pink, any excuse to use it LOL!!
Good topic, Brad…
+ agree w/Markus; time-limited discounts work, and right re continuous split testing is key
+ also good point Brad, re it’s a fine line in that you don’t want to ‘train your customers to wait’ strategically; from a branding and positioning standpoint
+ right Skip re demand curve/price point (hey that college econ class from 30 years ago was right, the supply/demand price curve)
The key in discounts is, “discounted crap is still crap” in the trading industry, and dressing up a pig in discounts or product launches still alienates buyers. And ‘overpriced crap is still crap’ as well.
Today’s traders are very savvy and skeptical; rightfully so. The OFFER and content quality is a lot more important than discounting alone. A combination of both works best.
also, when I think of quality suits I think of my $3,000 Brioni… 🙂
I feel huge discounts only hurt you in the long run. Once you start, its hard to stop cause your lists will only wait for them before rejoining, or joining the first time when they are ready.
If you THINK you need to do a discount, make it small, better than nothing for them though… or offer some educational package/bonus.
Or do what many do.. double your price, and focus on big discounts on every special occasion to give that feeling to your followers.. Many do it, it works, and affiliates want more sales offers that close sales 🙂
Solid points…how do your affiliates react to discounts? Feel it’s just a temp pump in numbers or solid value and sales don’t rise and fall as sharply?
If the reason why a discount is being offered is framed in a way putting an exclamation point on a product’s value, then the “training” is not counterproductive.
Then again, what’s being discounted should not cheapen the product’s value to those who paid full price. That’s why non-discounted offers should have bonuses, the likes of which those who do not jump on the offer might find not as compelling as those who do jump on the non-discounted offer. Obviously, these bonuses would be removed or deprecated in the discounted offer.
Discounting is a strategy that definitely should be part of a vendor’s sales funnel, particularly if there are multiple segments to whom the vendor caters. Whether leads who have never been converted into buyers are best targeted is debatable. It depends on the offer, its bonuses and the sales funnel’s back end.
Considerable thought need be given to bonuses attached to each offer in the sales funnel. Bonuses attached to a non-discounted offer present added sales opportunities to those who accept a discounted offer. Indeed, this opportunity might even be exploited via an OTO, the likes of which makes the “discounted” offer more pricey than the original.
Likewise, those who bought the original, non-discounted offer who subsequently pitch a fit on account of the vendor’s discounted offer present the vendor another sales opportunity. Oh, you didn’t experience the value of bonus A included in your non-discounted offer? Well then, you might try product X to take that bonus’ potential to its fullest potential.
Obviously, the need for a well-developed, logically connected sales funnel is prerequisite.