Disadvantages of Offering Discounts at Your Business
Like, it actually starts making me feel queasy when someone wants to talk about reducing prices! (And I do actually puke a little when people suggest increasing prices so they can discount to the ‘real price’.)Okay, just had to get that off my chest before we got started.
In fact – once you would really figure out how to price for optimum sales and profit, you would be able to master the art of ‘How To Charge Higher Prices Than Your Competitors Still Win The Business!’. A great many people struggle with pricing because they have emotional issues about money themselves.
Anyway, today isn’t going to be about how to arrive at the optimum price for your or your client’s products or services, although if you want to be able to add instant value to client relationships, pricing is the silver bullet. We can come back to ‘pricing’ at some other time if people are interested.
Today I’m going to share a technique I discovered for presenting ‘discounts’, whether it’s in the form of a ‘sale’ or something like a ‘FREE Book, Pay For Shipping’ offer. But you’ll also find this technique useful if you are ever presenting your offer to a skeptical audience – which nowadays is pretty much any time you write copy.
Leveraging the Psychology of Discounts to Make More Money
That image Above was an actual ‘headline’ I wrote for a client (You know, haha, dumbest headline in history right!) after he insisted on running a January sales promotion because. You can guess it, all of his competitors would be having a sale.
Reviewing his previous January sales and profit figures proved that logically, even just sitting tight and doing no promotion during January would have made more sense, but emotion prevailed as it usually does.
You see, the problem with reducing prices is that people always think that they can make back the lost margin through increased volume. Almost never happens. But as you are about to see, by applying a couple of psychology ‘levers’ and ‘pulleys’ in your sales copy you can actually recover quite a bit of ground.
So, the headline was simply ‘SALE NOW ON!’. But then I added my little friend, the ‘Asterisk’.
And I bet that there wasn’t one of you that didn’t immediately spot that little red asterisk and then a split second later want to know what the ‘3 tiny catches’ were, even though you had no idea what was being sold. Gotta love human nature. And the fact that if you put a hurdle in front of someone, they can’t but help wonder if they could jump it.
That little asterisk more than doubled his best-ever January, took a whole bunch of money out of his competitor’s sales projections, and enabled him to claim back some of that lost margin through that significantly increased sales revenue – you’ll see how in a second.
More recently, my little friend the asterisk placed next to the word FREE* in the headline for a ‘FREE Book, Pay For Shipping’ offer got it to #1 in Clickbank and helped the campaign win a prestigious direct response marketing award that had been vied for by many top names in the industry.
I’ve also used this asterisk technique very effectively when using the word GUARANTEED in a headline.
In fact, I’ve used this (*3 tiny ‘catches’ apply) mechanism over and over again to drive readership and in some kind of a weird ‘marketing Aikido’ move, use people’s natural skepticism to get them to sell themselves.
Let’s face it, people expect there to be ‘catches’ so like any good salesperson deals with objections before they are raised, as marketers we simply need to give people the ‘catches’ we want them to focus on. And don’t be afraid to make the ‘catches’ real.
In this instance, I asked the business owner what the BIGGEST order was that he’d had in the past. Then I decided to make three catches.
CATCH #1: I made that number the minimum sized order! (I know, crazy right?)
CATCH #2: I doubled that number and told people that was the maximum they could order! (Even crazier, right? But he was flooded with orders for that amount.)
CATCH #3: I restricted the way you could order to just one method (the most efficient and economical for the client) because ‘obviously’ this offer was so good that it would not be possible to do it any other way.
And the next thing we knew, we had a buying frenzy on our hands.
Now, imagine what you could do if you combined the ‘egoic labels’ concept with the asterisk technique and made the ‘catches’ align with people’s ‘subconscious identity’.
Oh yeah, that’s exactly what I did with that award-winning ‘FREE* Book, Pay For Shipping’ offer.