Discounts can be a powerful way to attract new customers and make more sales. Bust most people really don’t understand how to use discounts the right way - and they get it completely wrong and that can literally destroy their business, and destroy the profit margins.
It’s not that hard to really understand how to use discounts, but you have to understand the concept once.
What you don’t want to do is to blindly discount your products. Instead you want to have a high perceived value, because discounts are actually challenging… because what they do is - yes, you can get more customers in the door, but when you discount your prices, in the prospects eyes, they are not just associating the discount with the money you charge, but also with the value you deliver. That means often the perceived quality of your services or product get’s hurt. You don’t want to be the discount brand in the people’s mind. Discount is okay if it’s a generic product - Walmart has made lots of money with it. But if you’re not Walmart - and I guess you’re not a multibilliondollar business, then discounts are not the way to go as a general selling strategy.

Instead the way you really want to use discounts is that you use them infrequently, and when you use them you give your prospects and customers a reason why you discount. And, you only discount a lead product. But you don’t discount everything unless in very specific cases which I will not cover here.

You want to have one low-priced, discounted product that gets the customer in the door and that completely overdelivers. Something that people buy for 20 dollars, but when they open the box they find that the perceived value is something that is worth a lot more - 100, 200, 500 bucks. But they just paid 20 dollars. And then you offer them higherpriced products and then they are much more likely to be inclined to say: wow, if he sold me that for $20, and I got a $200 value, then how much value must I get out of the $200 product? And you have really earned their trust and then they are much more likely to buy from you. And if your $200 product can deliver more than a value of $200, then it’s a very easy way to get a repeat customer. And even if the product is worth really just $200, you still have good chances, because that first impression was buying a $20 product and getting $200 worth of value, 10 times the value, and that will stick in the peoples mind.

You have to look at discounts as a way to attract many new clients. But once they are in the door, you don’t want to be the discount guy. You really want discounts to be something that is perceived as: “Oh my god, I can get a discount on this guy?” It’s like imagine Gucci or some luxury brand, a ferrari or porsche, doing a discount where you can get a car from them for the price of a volkswagen or something. There’s a high perceived value and then you offer a discount that gets people into a buying frenzy, people thinking: “Oh my god, this is such a great opportunity, I gotta get my hands on this now!”
And you also want to make it time limited, quantity limited, something like that.

Or you tell them they can get the discount ONLY IF THEY QUALIFY - and then you tell them what the qualification is.

You also want to be sure that you don’t bring in the wrong type of customer, because there are some people who are nothing else but “bargain bitches” (that’s what I call them). They will only be loyal to you as long as you offer them discounts. But as soon as you offer them normal prices, they will not buy from you. So you don’t want to attract these. You don’t want chronic bargain hunters.

So, ultimately I do encourage you to use discounts, but use them for your lead products. Use them to get new customers into the door, use them to turn existing prospects into buyers. But keep in mind that you want to limit this to your lead product so that you are a company that is perceived as a high-value company.

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When somebody tells you they don’t have enough money to buy your product or that it’s too expensive, then it really just means: “I don’t want it that much. The money is worth more than the product to me.”

But it also means that your prospect is SOMEWHAT interested. Otherwise she wouldn’t even be thinking about price at all.

But you haven’t demonstrated enough value yet. You have to show them that ONLY your product can give them the exact outcome they crave. And you have to tell it to them in a way they believe (using specificity, testimonials, screenshots and other social proof elements).

Mark Widawer wrote a great post on why people don’t buy, according to Frank Kern…

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Mark Joyner is a pioneer of internet marketing - and many people who have millions online call him a marketing genius.

He’s going to publish a book in early 2009 titled “Integration Marketing” and you’ll be able to buy it via Amazon.com or in your favourite bookstore. It’s gonna be worth it’s a hundred times it’s price.

But Mark wouldn’t be the genius he is if that would be all - because if you hop over to www.integrationmarketing.com now and give him your name and email, you can DOWNLOAD the complete book in electronic format for free and apply the strategy he shares before other businesses will even hear about it.

I just read the first 3 chapters and wanted to share this really quick with you… this stuff is PURE GOLD!

… but now I’m gonna finish the remaining chapters.

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