Let’s talk about flash sales, discounts and other methods that we see people use to try to get a quick burst of cash. This could really kill your business, especially if you are in the Informational Course business.
Let’s go over where discounts and price cuts work. Now if you’re a chiropractor, you provide some other recurring service, and you’re doing a sale just to get people in the door, that totally makes sense because once you’ve established that customer, then it’s a great idea to bring him back.
But for those of us that are in the informational business, please use caution when you do a flash sale on your products or you run a massive discount on the price because it is so hard for your customer to look at you taking a product from … Let’s just use the round numbers here … from $200 you say, “I’m doing a flash sale on it, it’s now $97,” and then they look at it a month later and it’s back to $200, they’re like, “Wait a minute, what the heck’s going on.”
It just causes confusion in the marketplace. I’ve seen a lot of course launches go really well, and then the owner of the course, in desperation, discount the heck out of it just to bring in some revenue, and then try to put it back up. Their audience is like “What are you doing?” It’s not good. It’s not good.
I’m inspired by this because I’m doing a lot of research right now on the courses. We’re developing courses right now for about seven different clients which has been a blast. I love developing these. It’s a cool new revenue stream for coaches and other thought leaders so that they can package all the information they have and push it out there.
Let’s dive into some psychology, even if you don’t have an informational course, hang with me for a second because we’re going to take a psychology lesson into understanding why people buy.
A lot of times as the business owner we look at this and go, “Okay, I need to cut my price so that I can drive more revenue,” but what if instead, you had a limited time bonus for taking action?
I’ll use an example. I made a huge mistake with my Video Marketing 101 course. I’m going to tell you what I did wrong, and I’m going to tell you what I will do in the future, okay?
I had the Video Marketing 101 course created about a year ago actually so it’s done really well, generated almost five figures for us, and that’s pretty good for a low priced product so I’m excited about it, and it can only go up.
We launched it and we did the introductory price and we bundled it with a whole bunch of stuff, and then we recently completely reupdated it with a whole bunch of content for like YouTube and Stories and all that kind of stuff. We raised the price with all the new updates and everything that we’re doing, and we raised it to $197. We actually got more sales when we raised the price then we had it before it was at the original price.
The reason is because people saw the value, right? Here’s the thing. Before we updated the course I ran a flash sale, and the flash sale took the price down to $77. Now there is some people that bought it for our regular price of $197, and then we tried to sell it for $77, and then I got hit with a lot of angry emails from the people that bought it at the $197 price.
Then when I announced my updates and I pushed it, I pushed some ads out there, and we relaunched it with some cool new bonuses that weren’t available before. Yes, we did well on the relaunch. However, we would have done a lot better had we not pissed people off. So, lesson learned, but things that got people to buy were the additional bonuses. When I discounted the price I really did not make that much money either. There was not a lot of sales made. It was a total flop as far as a marketing campaign goes, and customer service, and customer attention.
But when we relaunched the course with the new bonuses that weren’t there before, we got more sales and the reason is because they wanted the additional bonuses. So, lesson learned. Do not discount. Do not cut the price, add bonuses.
Now why is it that people do that? At the end of the day as consumers we are not actually making a price based decision, we’re making a value based decision. What that means is that the price that we pay for an item is determined by how much value we put in it.
So I am looking right now at this tube of whiteboard care erasers. Now I paid on Amazon, I think I bought this tube of wipes for like $15. So now, did I go out of my way to find these wipes and get them specifically for my whiteboard? Yes, and I paid more than I thought I would, but here’s why. I paid more for these wipes because there was more, this is a pack of 50, when I was expecting to pay about $10 for the pack of 25 which is what I had before.
So I paid more, but why did I pay more? Because I got more. So the price did not actually deter me, it actually attracted me going, “Why does this cost so much more than what I thought? Oh, I see, I’m getting more than double the amount of wipes in this little tube.”
In the same way, the reason why my Video Marketing Course sold so well is because people knew that my course talked of how to use videos in their marketing. They knew that my Video Marketing Course just got raving reviews, and people were like, “Oh, my gosh. You have so many cool new content ideas.”
They knew that already, then when I cut the price, that did not get them to move, but when I added the bonuses for the workshop and the one-to-one consultation with Veronica, our Social Media Manager, that got people to move because they wanted the additional limited time bonuses. So, lesson learned. Do not discount.
If you need help with your course, hit me up, Alexbranning.com/call. I definitely want to help you get started so that we launch this the right way.
That is my lesson for today. If you need to increase your revenue, add some more value in there.Throw in some more bonuses, and watch the phones start to ring off the hook because the price is not what’s keeping people away, it’s that they don’t feel like there’s enough value to compensate for the price.
All right you guys. Have a great day.
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