- Buy now and save!
- Pay now and use later!
- 75% off all apparel!
- 12 Days of Deals!
Offering sales and discounts is a great way to create buzz for your business, bring in new clients, and reward existing ones. The problem comes when the deal is so good that it actually causes you to LOSE money.
Sure, you get an initial influx of cash, but if you’re not careful in how (and when) you offer special discounts, you’ll be trying to recover from them for a whole year…or more.
The Too Good to Be True Deal:
You need to move some retail, so you mark it at 75% off everything in store. And it works! Clients are coming in and filling up their carts with shirts, jewelry, shoes, everything.
You had record sales, but now you have sold out of just about everything and need to restock. That’s a good problem, right? Wrong!
Now you have depleted your inventory, but only made a fraction of what you spent and not nearly enough to restock. Moreover, all your clients have had their fill and even when you buy new merchandise, they don’t feel the need to purchase because they just did. Ug!
Before you decide on a “everything in store” deep discount, make sure it makes sense for what you are trying to accomplish. Maybe retail isn’t much of your revenue. Maybe you bought some items that just won’t move. Maybe you need to get some butts through the door. Whatever your reasoning, make sure the discount supports your intended outcome.
The Mark-it-Up and Down Deal:
Ooooo, this one is tricky! You mark all your items up, so you can then mark them down at a “discount,” even though the discount is either the same as the original price, or barely less.
Let me clue you in—this could be construed as deceptive, and not just to your clients, but by the Federal Trade Commission. Yup, you could actually get sued for this. Not worth it!
Whenever there is a chance of misleading or inadvertently false advertising, you are putting your company and your reputation at risk. No amount of cash influx is worth that kind of exposure or liability.
The Get a Lot Now Deal:
You need cashflow and quick. Why not get your loyal customers a chance to pay in advance in exchange for a deeply discounted rate? I see this one a lot in the fitness industry:
- Buy a year’s membership and save X amount of dollars.
- Buy a year’s membership up front and get two free months.
- Buy six months of lessons and save 30%.
Whatever the deal, have you done the math? It’s awesome to get so much money up front, all at once, and it can definitely help you with your immediate cashflow issues. The problem arises down the line.
As you get closer to the end of the year, all those clients are looking for another deal, maybe the same one…maybe a better one! Now your discounts are compounding and your expenses have only gone up. Now those clients feel like they are entitled to that lower rate, or worse, that your services are WORTH that lower rate. Yuck!
The solution? Getting all the money upfront can be an amazing feeling; just make sure you did the math on what you are offering. Or better yet, offer value add-ons before deeply discounting your services.
There is absolutely a time and place for the well-planned discount or sale! The important thing to remember is that it must be well-planned! Your sales need to reflect your desired outcome—focusing on better clients and sales, not more. If “more” will truly be better for your business, don’t forget to look to the future and project how this will affect your bottom line three, six, or twelve months from now.
What types of discounts and sales have worked for you? Which ones definitely didn’t?