From the desk of Razvan Rogoz,
When I was a kid, I didn’t receive a lot of disposable income. Most of the clothes I’ve bought were from local stores or bazars. Yet, there was one store which offered some good discounts. Almost everything was 50 – 60 – 70% discounted. If you bought for $100, you would pay only $50.
So each time there was a major sale, I would buy from them. The problem was that the discounts were so big that it trained me to wait for them. It made no sense for me to purchase anything but the one weekend per month when it was discounted. Years later, I’ve realized that I wasn’t the only one who did this. This store was full during the sale period, empty during the rest so right now, the discounts are year long. They’ve killed their profit margin by giving too many discounts and training their marketplace to wait for them.
Now, discounts for clothing is not rare. Zara offered them some weeks ago too. However, it was for a week or two. These discounts are rare. If I need a pair of jeans, I won’t wait four months to get it.
This relates to you directly. When you are giving discounts again and again, you’re training your prospects to wait for your discounts. They’ll never buy when you sell full price. Since discounts are designed for customer acquisition or for clearing stocks, they are not good business strategies. A business that’s always selling 70% off is not going to stay in business a long time.
A discount should be an extraordinary event. This is something that should happen once a year or twice a year. It also must be justified, as a Christmas sale or an anniversary sale. It should give people who never bought from you before a chance to enter your ecosystem. It should not be a chance to train your existing buyers that they can get the same product if they wait for cheap as opposed to paying now. Use discounts as a strategic tool that the more you use, the less effective it is.
But if you don’t discount your prices in order to boost conversion, then what can you do? You offer bonuses. You keep the same price but you increased the perceived value. If you are selling a pizza for $10, instead of discounting it to $7, keep it at $10 and give a bottle of Cola. From a practical perspective, you lower your profit margin but you are not lowering the perceived value of your brand. He feels that your pizza is worth $10 but also gets a nice gift.
Are you interested in discovering how I can help your business or how we can apply these concepts to your own venture? Then let’s have a talk. For a limited time, I’m giving away complementary 30 minute calls. In these sessions, we’ll discuss ways in which we can maximize your customer value, boost your conversion, achieve more sales and increase any other relevant metrics in your business.
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The Business & Self-Improvement Copywriter