What is it that makes a promo a truly GREAT one?
Free shipping over $99 isn’t a good offer but…
“Three items for $49” is!
“Save $20” is!
“Get a free ‘x’ with every order this week” is!
“BOGO or Buy 2 get 1 Free” is!
“New product” is!
You will also need a great hook or an “angle”
“Love yourself” or even “Lower stress” aren’t angles…
These aren’t gripping hook points that get people to turn the car around, take a second glance, or drop everything, etc.
These are great angles:
Why they stole Einstein’s brain
The leg cramp that ended my running career
Stress gets stored in our DNA
Your immunity is being attacked this year
Big brands often have weaker hooks to appeal to wide audiences.
They often are large enough to command shelf space and long term contracts with retailers.
They use celebrity endorsements, sampler programs, and many other ways to make their product appealing.
These are things smaller brands and online stores can’t easily do!
“I’m ‘Premium’ though…Ferrari doesn’t offer deals!”
Well…their business model is focused on low-volume, handmade units. They only WANT to sell a small number of sales per year! Do you?
They make huge revenue licensing their logo for use on clothing, laptops, RC cars, model kits, etc.
They have no intention of scaling up and selling 100,000 vehicles per year!
Many premium household brands do go on sale at your local supermarket.
The real shocker? The brands are running the promos.
The brand controls the price!
They have to…some retailers would sell at cost just to under-cut local retailers (Walmart tried this for years).
Price must be controlled by manufacturers/brands.
So yes, premium/high end products DO go on sale. Granted, not at 35-60% off or more, but they have sales.
Hey! Why not just inflate the prices?
You should price with enough margin that you have room to offer specials.
(Pricing strategy is a topic worthy of an entire textbook)!
You can even be the highest priced if your product is worthy of it…meaning it’s better than others like it – and you can prove it! Perhaps it’s unique.
If you’re thinking of using an inflated price to justify everything always being on sale…please STOP…customers aren’t that naive.
Your inflated price will become your regular retail price, defeating its intended purpose.
Inflated prices also depreciate your brand perception…talk about amateur hour!
So, how do I use discounts wisely?
Well, you absolutely have to have a sale now-and-then.
What you must never do is discount to fire-sale pricing without a VERY good reason for it.
Usually 10-30% off most products is within reason.
40-50% off discontinued, refurbished, or reconditioned items is reasonable; however, there’s no way a premium brand sells anything at 70% off unless they are liquidating or going out of business.
They’d rather burn their stock! (Some brands have!!)
What you want to do is rotate your discounts so it seems fairly rare (maybe twice a year) that your whole store is on sale.
Black Friday is a good example and excuse to do this.
And…if you can’t discount – you need a good hook.
A solid “why should I care?” Or “why is this relevant now, and what’s in it for me?!”
Hooks create curiosity and tease they have something you know you want or need.
The angle and offer (even without discount) are really what will close the deal.
If you’ve got a mediocre hook, offer, and angle…you’ll have mediocre sales – it’s that simple!
Pricing for the big picture.
When locking in your prices, you’ll want to consider making room in your margin for affiliate commissions, wholesale, and the odd special.
Affiliates usually won’t promote for 5% unless you’re big-ticket or hard to get.
Aim for at least 20-30% (and still profitable).
You may wish to leave room for low volume affiliates to get 20% and higher “super affiliates” to get 30%.
Exceptions to margin norms:
Truth is, some products are known in the industry to have low margins.
Things like power tools, some foods, technology etc.
Sometimes a 5% off offer is a great deal! Look at competing or similar markets and aim to be similar.
Don’t think short term sales and be “the very lowest”.