It seems like almost every business is constantly offering some sort of promotion or discount and often times, you’ll notice a trend where brands are continually offering deeper and deeper discounts to desperately attract new customers. This is unsustainable discounting, it’s a dangerous practice that could put the future of your business in jeopardy. There’s a wrong way to discount and there’s a right way – keep reading to learn how you can continually offer promotions and gain new customers sustainably.
Don’t keep offering deeper and deeper discounts
Plan out your promotional strategies and stick to them. It may be tempting to run that 50% off e-mail campaign to meet your subscriber goal for the month, but don’t give in! You may see some short term benefit, but it will increase churn because it changes the customers perception of the value of your product – in other words, it cheapens your brand. Before you know you it, you won’t be able to gain any new customers without offering a super deep promo because customers will be sitting on the sidelines waiting for them.
It’s true, many customers won’t buy anything without some sort of promotion
It’s unfortunate, but that’s the culture we live in now. Most times, If you’re driving quality traffic to your website, those potential customers just need a little push. When building your pricing model, consider potential promo’s you might offer. With my business Escape Monthly, we built a 20% off for life promotion into our budget from the very beginning. Our published retail price is $49.95, but we run our business assuming $39.95 as our average revenue per user. This ensures that our 20% off for life promo will be sustainable long into the future.
Free trials often attract low quality customers
It’s okay to offer reasonable promotions to pick up those potentially great customers who are ‘on the fence’, but don’t open the flood gates with a ‘first month free’ promo – it will only attract low quality ‘deal hunter’ types. This will increase your churn and lower your average lifetime value.
There you have it! Use coupon codes sparingly and be cautious about running super deep promo’s to quickly gain new customers – it’s simply not worth it in the long run.