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Wednesday, April 24, 2024
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The Problem With Running Specials (And How To Fix It)

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What if everything you sold became a commodity, right now?

That’s right, like livestock, metals, energy, corns, wheat or rice… Overnight, your services or products become something to be haggled, simply compared to somebody else’s, over price.

What if all your …

  • Years of studying,
  • Decades working in the industry,
  • Dedication to your clients,
  • And lastly, vision,

Amounted to… your clients choosing someone else over a 5% discount.

Ouch. See – this may sound crazy – but this is already happening.

Chances are, if you think that running a discount on your offering is the standard, not the exception, you may be suffering the long-term effects of running specials to your clientele, day-in-day-out… This leads to unconscious reactions to your offer, every time… Let’s dive in.

Inevitable Reaction #1 – “Hold on, if they can discount it by 50% now, why would I ever want to buy it at full price?”

Imagine, if you will, your customer base as actual human beings…

You know, the kind that eat, sleep and go home to their families, once-in-a-while. Imagine that to every action your take towards these human beings, there is an equally necessary reaction from their side.

If I’m looking at an online coding course, and the price-tag says R3,000.00 – only to have their retargeting ads find me and declare I can claim a 50% discount – how much belief would I hold onto about that first price?

What, are they over-priced? Or can they simply afford to do this, because it’s online and it works? Look – we’re not ones to dispute that those discounts work but they also throw into question how much faith you have as a business owner, in your premium product.

(Extreme example: we don’t see Apple, nor Tesla discounting their products at all)

Inevitable Reaction #2 – Dropping your prices whenever, makes you transactional, and your customers feel it

See, imagine if your competitors did the same thing, but instead of discounting 50%, they go ahead, bundle another course with this coding course and charge even less!

What! Did you know you were entering a price war when you started? Get enough competitors throwing their prices to the ground, and you begin to train your marketplace to find the cheapest deal.

“I mean, how different can each service really be from one another, right?” – all your customers

It’s the appropriate response, really.

This is how you:

  • Your expertise and your efforts become commoditized.
  • You can lose the loyalty of your customers over the long-term
  • This is when business can become unpleasant, when the only thing creative about your business is your pricing…

How to get ahead of this

  1. Develop Awareness Of How You “Train” Your Marketplace

When you do something, there will be a reaction to it. You may get more sales, yes, but perhaps your competitors will start to discount their products too? Being aware of the impact you can create, especially when you’re putting your adverts in front of 100,000 people a week.

  1. Consider creating loyalty over “quick-fixes”

We aren’t the first people to speak about this. Building relationships with your readers and helping them see you as a “company of people”, as opposed to just the cheaper option, is something that has been discussed at length by experts such as Adam Grant and Simon Sinek.

Yet, we still see the market governed by the latest price-drops.

To change this, would mean a new focus on cultivating relationships with your best customers – and dynamic approaches to providing value in the form of:

  • Facebook ads,
  • Sharing value + information freely,
  • Mailing your customers regularly (with valuable content),
  • And of course, having helpful conversations with customers!

Will you be brave enough to discover what it means to maintain your prices and develop a loyal following instead?

Look – we get it – if everybody’s doing it and getting immediate results, why not run discounts, promos and free events to promote your business?

We would argue that it all comes down to what kind of business you want to run. It’s in your wheelhouse to decide:

  • Do you want a business built with a focus on short-term gratification (a month with high volumes of sales)

Versus…

  • A business built with longevity in mind? This entails, repeat business, with multiple levels of sales later on, based on how much your customers love your business.