A Few Great Reasons To Discount That You Can't Overdo

In a previous post, I mentioned I'd revisit the subject of slashing prices or discounting.

The best reason to discount is to enhance a client relationship - to make a client feel particularly special. If you discount frequently, you lose this opportunity. If you practice a little more discipline with your price-marketing strategies, you'll have a very powerful tool in the form of discounting. Here are some ideas for when to do it:

1. The anniversary of a purchase or first contact. When you make an offer specifically for the client to commemorate the beginning of a relationship, you bring back happy memories of that time.
2. The client's birthday. I don't recommend simply offering a discount - if you can, send a nice gift that's unrelated to your business - the more insightful, not necessarily the more expensive; the better. Send your offer in the form of a gift certificate along with a physical gift.
3. As a reward for interacting with you (or for doing so the quickest). There are plenty of good reasons to interact with your list, and particularly when you'd like to survey them for information, you can offer rewards for those who interact with you. Perhaps the first ___ responders will receive a coupon.

I also want to identify a suggestion by reader Javier Ramos (http://www.javierramosblog.com/) who reminds that discounting is also a good way to liquidate old inventory.

As far as I'm concerned - if a penny saved is a penny earned, then a penny discounted is a penny spent. The only good reason to "spend" in the form of discounting is to enhance your business, and that kind of currency is best used, and can really ONLY be used to pay for a happier client.

Why Frequent, Different Marketing Is Important - The REALLY Short Version

One of the basic premises in marketing (especially for small businesses) is that you shouldn't expect a person to stay motivated on a single benefit for the life of your business.

I teach people to relate their client relationships like social or even romantic relationships, and that thing that you do that she really likes isn't going to stay cute forever... and now you're talking about a relationship involving the exchange of money.

As they say "never underestimate human laziness."

The most exceptional entrepreneurs are frequently reminding their market (or giving them new and different good excuses) to use their service or product. Lest they go elsewhere because it's more convenient, or they discover a benefit you never pointed out with someone else!

It's not something every business owner is willing to do, but that's why they call it exceptional, right?

Told you this one would be short.

Three Ways To Offer A Great Deal Without Slashing Prices

Most small business owners think that the best way to get an advantage in their market is to offer competitive pricing. The rationale being "the less I charge the more people will want to buy from me."

What that really means, however, is that the less you charge the more people you have to find to reach certain margins of profit.

Because getting more people to find your business is more difficult, it also costs more money to do so - and if you attempt to charge the lowest price in town, that means you have the least money in town to advertise and attract more people with.

When these low price strategies fail, the business owner usually feels their prices are even still too high and they begin to permanently slash prices, or offer frequent discounts.

Margins get even smaller, but advertising needs remain the same. See the problem here?

Instead of thinking the only way to attract customers is to slash prices, you've got to offer a great deal.

How do you do that?

What your market is looking for is a solution - not an oil change, but longevity of their automobile investment; not a book, but the life changing information within it - you get the picture. When you slash your prices, you convey to the market that the only thing you understand is their desire to save money in the short term. You have not conveyed to them that you understand the nature of the problem they are looking to solve.

Instead of slashing prices, consider the following alternatives:

1. Beef up your offer with more of what your clients enjoy out of it - if you can do this without a significant increase in cost, don't change the price, but advertise the added value. In service businesses, this is relatively easy to do - just add more service, or more specialized service. If you offer a tangible product that you can't change - then offer a service that ensures long term enjoyment of the product with purchase, like warranties, guarantees, or training in proper use.
2. Offer a bundle of products that can more effectively solve a problem together than an individual product could alone - in this case you could discount, or you could beef up the offer the same way discussed in the previous tip - "for a limited time and for a limited number of fast-acting clients, if you purchase x AND y, you'll get z, absolutely free!" "Z" could be nothing more than a video of how you use x and y yourself to get the best result. Even better, make it a video of other clients successes with x and y.
3. Another price strategy that you could use is to announce that your pricing has gone up due to an increase in demand, but if your clients hurry, they can "get their hands" on your offer before the increase - in essence, you'd be offering a discount on a price increase that hasn't happened yet.

I won't tell you that slashing prices is a bad way to stimulate sales, but it is a bad way to grow your business. If you really want to be competitive in your market place, you've got to do something that your competition can't do - and everyone can slash prices here and there.

Personally, there's only one situation in which I'd offer discounts, and it's not because I'd want to stimulate more sales, there's a far better use for them than that. Look out for it in my next post!

The *Right* Customer Is Always Right

This post inspired by an article posted today in the Miami Herald:

Business owners go to extremes to keep clients happy

http://www.miamiherald.com/business/small-business/story/1151769.html

[The gist: Just like the title says... but it's NOT pretty!]

Don't get me wrong. I'm ALL FOR impressing your clients, but I have to say, if I had to give a one-line response for this article, it'd be this:

"If you'll bend over backwards for them, they'll only love you as far as you can entertain them."

What does it take to make my clients happy?

Actually, it's too early to ask that question. I want to get you thinking about something else first. Let me explain.

In this article, entrepreneurs are making major sacrifices to keep a client happy. In every case, they cite a single example of keeping a single client impressed.

If they've got more than one client, and they've got to go through ALL that with just one... they don't run a business; they've got a JOB!

Think. Why do entrepreneurs get into business?

It's different for all entrepreneurs when you get specific, but I can guarantee it isn't ever to put more stress and strain on themselves than a traditional job would - even if that's what happens to the typical entrepreneur.

But why would you ever want to be a typical entrepreneur?

Or get typical results?

To underlive or be overworked like a typical entrepreneur?

To get atypical results (i.e. great success) you've got to set goals. Doing that alone will put you well ahead of the rest, but to belong with the real elite entrepreneurial players, you've got to have VERY specific goals - in honesty, something I'm always challenging myself to do.

I enjoy EVERY victory, so rather than plan for one big one, I'm always extracting a bunch of small ones I can celebrate more frequently.

So to tie that back in with the topic we started with... You may have previously set a goal "to help out the folks you have the talent and ability to help and make a living at it" but if those people drive you to make sacrifices just to make them happy, it's NOT worth it.

Instead, the goal above needs to be expanded: "to help out the most qualified, conditioned, educated-on-how-to-work-on-your-terms folks you have the talent and ability to help and make a fantastic living at it and enjoy it!"

When you can determine who those people are and how to accomplish the expanded portions of the goal, then you can ask that question:

What does it take to make my clients happy?

Then you can make it happen while simultaneously making yourself happy.