I came across an interesting article the other day that demonstrated why discounting your prices is sometimes a psychological turn off for your potential clients. You can check out the article here…
In the UK, like many other countries around the world car dealers are experiencing their slowest months on record, with showrooms being deserted for days on end… One particular dealer for the Dodge brand was trying everything it knew to drum up some interest and clear their stocks.
Discounting Their Prices Didn’t Work
They tried heavily discounting their prices, cutting as much as 50% off the price of brand new cars! But with no interest. Then they tried something different and 22,000 phone calls later they realised they were on to something.
They increased the VALUE of a sale, by making the unprecedented step for car dealers of offering a “buy one get one free” on one of their models.
Essentially the same as a 50% discount in money terms, but psychologically very different.
I certainly believe that discounting a product heavily has the opposite effect on a potential buyer, it sends a message to your prospect that the product was NOT worth the original asking price in the first place. However increasing the perceived value shows that your product is still valued at the asking price, but adding something else in sweetens the pot.
Bonuses For Bonuses Sake
On the other hand I am not a believer in adding a huge amount of extra bonuses like we see in our industry. A million extra reports or any additional widgets, sparkly things and gadgets from any source we can obtain them from, just devalues your product… however giving extra, truly valuable bonuses is going to entice your buyer to dig out their credit card.
For my bootcamps, I have tried a different kind of discount that promotes positive action AFTER they have bought their place. Actually I offer 3 bonuses, one is my Goal Achievement Strategy workbook, which I use with all my Personal Training clients, access to the PRIVATE community site for all the bootcamp attendees and the discount!
Discount for Exercise Adherence
The discount works like this, if the client comes to EVERY single workout during the month, then they will get a 25% discount on the NEXT bootcamp. This is not offering a discount for discounting sake, but rewarding commitment to sticking with the training. See how that is very different.
Let me know your thoughts on discounting, and what things you have tried in the past, add your comments below and don’t forget to do the old social bookmarking thing…
Tim
Follow me on Twitter
BTW all my bootcamp filling tactics are available in the Group Training Success System, click here now to get your charter member access today
About Fit Geek
Tim,
Thanks for the perspective. I’ve battled with this notion many times in the past — wanting to give price discounts without lowering the perceived value of my services. I think one of the reasons I’ve struggled is the inability to come up with creative ways to increase perceived value for the standard rates I charge. This post gave some great ideas!