Sometimes you have to make a decision that hurts and helps.
I gave a discount.
It’s not the first time I’ve ever done it, it probably won’t be the last time I ever do it. But I teach against it. And I preach against it.
If your price is $1000, and you discount down to $900, $100 comes right out of profit. And in these times, profit is the only saving grace of business.
My public seminar tickets sell for $149 each. If you buy 10 or more, they are $129, and it’s been that way for some time.
Last week we had a meeting of everyone in the public seminar department, and decided that for the rest of August only we would offer our customers a $30 per ticket discount. And even though we sold a lot of tickets, I took a lot of flack.
People wrote to me, emailed me, and called me out on the fact that I was giving a discount and going against my teachings. Not many people, but enough to ruffle my feathers. And it should be said that ten times as many people thanked me. And fifty times as many people bought tickets.
Back to the discount. I agonized over whether I should offer it or not, knowing that people were going to yank my chain about it. But this is how I made the final decision: The amount of money that we would “lose” was not going to be “make it or break it” dollars. In fact, by comparison to the rest of our income, it was a very (very) low percentage. With the economy in the state that it’s in, and many companies canceling their own sales meetings, and not supporting their own salespeople the way they used to by paying for one of my tickets, I decided to make this offer directly to salespeople.
My email magazine reaches more than 300,000 people. The preponderance of the readers are traditional salesmen and saleswomen who pound the pavement and pound the sales phone lines to earn a living. I decided to take money out of my pocket, and allow it to stay in their pocket so they might have an incentive to buy a ticket on their own, without reimbursement from their boss. And many did.
The dilemma was, “Do I try to help my fellow salesperson, or hold my price and potentially preclude them from deciding to attend?” The choice was easy. I decided to do it, I actually decided to try it. The sale ends tomorrow. We will have sold several hundred tickets to several hundred salespeople. Many of who sent personal thank you notes and emails of gratitude.
Maybe I did go against my teaching, but I did not go against my customer. I also stated that this discount was for a limited time – August. If you call here on Thursday and ask for the discount, you won’t get it. And it will be removed from our website.
And please keep in mind this was not an “I have to do this” discount. This was an “I want to do this” discount. Yeah, maybe I’m justifying it. But I didn’t do it to stay in business, rather I did it to promote goodwill and give more people an opportunity to attend a sales seminar that just might help them succeed through this economic mess.
How are your prices holding up? Thinking of offering a discount? Thinking of having a “sale”?
Many companies are discounting out of desperation to make sales. Companies that sell cars, houses, and furniture are examples of businesses in trouble that are seemingly forced to discount. I was not. I was creating my own stimulus package for my customers.
If (for whatever reason) you are going to offer your customers a lower price, the following guidelines will help ensure success, and insure customer loyalty:
1. Make certain that you can afford to discount.
2. Make certain there is some profit for you after the discount.
3. Have a start and end date. Do not go beyond the stated end date.
4. Have the promotion in the hands of ALL your customers electronically (proactive email is best).
4.5 Make certain that accounting is as involved as sales and marketing.
In this economy people have come to expect discounts and “sales” as a part of the downturn and (slow) recovery. If you choose to offer one, make certain that your customer feels valued, that you can back it up with service, and that when the discount period is over, you have your goodwill intact.
If you want a few more thoughts on discounting, go to www.gitomer.com and enter the word DISCOUNT in the GitBit box.