Discounts are a great way to attract customers. But, you know, buyers (secretly) don't like discounts. Not because discounts are bad - because the product used to be without them.
Let's say, imagine yourself:
- For foundation News - the product you're interested in;
- The price is fair, say €20;
- You buy a product, you're happy;
- A month later, you see a promotion - the same product is now on sale for €10, with a 50% discount.
How do you feel?
Sure, you can console yourself with "at least I bought it before everyone else", but what if the product is just a few days before the discount? How do you feel? I'm sure you feel cheated, to say the least, don't you?
Discounts are eye-catching, but shoppers don't like discounts because they feel bad when they see a product for less than they bought it for.
What are you, the seller of the product, to do here?
A) You can never buy the product + add extras.
A discount is not the only way to attract attention. You can always keep the price the same, just offer an extra bonus with each promotion that is not costly to you on the cost side.
Lithuanian telecoms companies often do this. You buy a subscription and, lo and behold, with this offer you also get a month's subscription to Spotify. The cost of that subscription is just under €0, but the advertisements might say €9, or whatever the current price of a Spotify subscription is. There is no lie in the advertisement, because value is not the same as cost.
B) You can continuously increase the price of the product.
Yes. "Every month this video course gets more expensive, because everything in the country is getting more expensive, and the course information is not getting any older." Or something like that.
Actually, you've probably already realised that almost all sellers do this, strange as it sounds 🙂
IMPORTANT: You CANNOT, under Lithuanian law, increase the price and then artificially "reduce" it with a discount. This is forbidden and violates a whole host of advertising and pricing laws. So don't inflate the price with the idea that you will lower it later with a discount. Don't blow it with the idea that materials are getting more expensive or whatever you can think of.
C) You can keep making the product cheaper and... lose money and customers.
When your product gets cheaper and cheaper each time, your current and former customers see this, feel cheated, and won't buy from you again at full price. Who can buy at full price, knowing that a month later it will be twice as low?
But customers are not the only loss. The cheaper you sell, the less you earn. And you like money, don't you? Often discounts attract more customers, but the amount of those customers does not make up for the discount!
I noticed this when I was selling a self-help course-tool on Onbo.lt, where selling the product for €60 a month we had about a thousand customers, and with the special 50% discount - the number of customers was only about 1.8-2 times more. In Sum, we were earning the same or even less and... we were disappointing early buyers. That was a mistake.
I've noticed that I do best when I set the price and don't discount. I like to use method A, to offer each customer a premium that is tailored to them and that benefits them.
