Exceptions to the No-Sales Rule
March 13th, 2013 // 6:30 pm @ Million Dollar Methods
In the previous issue I outlined the consequences of discounting prices, including the severely damaging customer behavior modification.
Today, though, I want to introduce three scenarios where it DOES makes sense to discount and initiate a ‘sale’.
The Release of New Products
You see the play out in electronics where products become obsolete quickly. As a new product enters the market, the previous version is often discounted.
This makes a smart strategy when the price of product or service is the prohibitive factor for a portion of your customer base or target market. This provides budget-driven buyers an opportunity to still become your customer.
Tread lightly here, as you don’t want to cannibalize sales of the new product. As Apple has learned, it’s best to promote what’s next, before what’s old.
Reactivating Lost Customers
Another instance where sales can be powerful is when you need to reactivate lost customers. Giving them a discount BECAUSE they were once a customer not only re-engages them but also makes them feel valuable.
Previous customers don’t want to be treated like brand new prospects, in fact they can be insulted. It’s critical to recognize them as ‘lost’ (or past) customers and that you value their return. Introducing a sale just for them achieves these goals.
Motivating Stale Leads
There is not much value in a lead who remains a lead forever. It’s your job to motivate him/her from being ‘interested’ to being a customer. Sometimes, discounting your price is the only way to do it. Part of your target market is ALWAYS looking for ‘The Deal’ and would rather not buy than pay full price.
You, of course, have to define ‘stale’ for your business. At what point is the lead losing interest, moving past making a buying decision, and equates to a high probability of NOT buying. In contrast to a dead lead, who cannot (or will not) become your customer.
This Profit Report does conflict slightly to my “No Sales” rule, but the defining element is ‘whether you would rather have this person as a discounted customer, or no customer at all’. Your goal is to limit to amount of money left on the table; when you are dealing with these three scenarios, they is only money to be gained.
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