Discounts Are Horrible Except When They Work...
How online businesses are able to generate millions using discounts and how you can do the same in your local business.
Local businesses pay attention. We discover the technology used by Billion Dollar Corporations and make it available for you. Because we want you to grow and impact your community.
“Discounts are horrible… Discounts shrink margins and profits. And attract the wrong people who are always looking for a deal.”
At this point, you either agree or think I’m nuts…
Those who agree should pay close attention because this is for you.
The problem with the statement above is… it’s completely correct if you have a broken model.
I’m afraid you’re a victim of only having a front end product. Your sales process is like this.
Find a customer – Make a sale
Find another customer – make a sale
Maybe you’re lucky enough to have a customer return. But it’s 100% dependent on the customer to remember to return to your business.
The problem with this model is… you have to make a profit on every person or else.
Let me say it this way… A discount is only a problem when you run out of offers.
The biggest objection we hear especially with services is “but then people expect you to do XYZ for nothing…”
Great… Take those expectations, package it up into a new offer.
What I’m going to show you is how online businesses are able to use discounts to grow million dollar businesses. And how you can replicate it into your business.
3 Ways To Discount
They have back-end products and are willing to lose money on the front end to buy a customer.
Savvy business owners know the best customers are buyers. So they don’t let their buyers go to waste. They warm up their audience with a low offer. Then as they build that relationship they offer a bigger and more expensive offer.
They play the long game knowing that the back end offer will make up the loss on the front end.
Lesson… “The one who can spend the most amount of money to get a customer win” -Russell Brunson
When you have a back-end offer, your focus shifts. No longer must you make a profit on every sale. Now you buy a customer on the front end. Your goal is to break even or take a lost… So you can sell them something bigger.
The second thing different is… they have a list. There is a cost of admission to get the discount. And that admission is the contact information. This is essential because they don’t wait for the customer to return. They can reach out to the customer. Without building a list, you’re relying on new customers and random referrals.
Meanwhile, businesses with a list are able to email, call, follow up, and create sales on demand.
Of course like all great tactics this model is starting to see its own set of problems as more people do it…
It’s as common and expected as stock images. First, when new it worked well. But now people expect it. And conversion rates are dropping. So what now?
There is a fundamental problem when we give out discounts at mass. Whether it be a coupon or an app, or a “tripwire” as it’s called…
The person receiving it has no commitment to it. There’s no personal investment.
Yet, Studies show that when a person wins something… it changes how they view it mentally.
They’ve earned it. And so they attach to it. And this is a minor tweak to make in giving discounts.
That mental attachment is an essential component before adding them to your list. Because now instead of ignoring your messages… they expect it.
If you don’t have a back-end offer then your action steps are to create one. Understand that creating a “repeat buyer” can also be a “back end offer”. You sell them more stuff.
None of this happens without creating a list. Your awesome customer service and friendliness is no match for human nature. People will spend weeks reminding them self to visit you again. And in the meanwhile, it’s lost revenue.
If you or someone you know local business depends on foot traffic then we recommend the Glass Jar Method. It’s a system that uses a simple glass jar and psychology to get your customers to return and spend more.