OK, I’ll admit it…as a consumer, I’m a sucker for discounts. Show me something that costs $75, tell me I can have it for $50, and I’ll be halfway through entering my card details while my brain is still trying to figure out whether I actually need this item at any price.
Many of us respond that way to discounts because our brains are wired for it. “Ooooh, 20% off that sweater I’ve had my eye on? Yes please! Send me allll the coupons!” And as a course creator, you might be tempted to follow this common selling tactic in the hope of a “quick win” to boost sales.
We totally get why—if your sales are down and you’re scratching your head thinking “Gee, how am I going to make up these numbers?”, offering discounts to customers can seem very appealing.
But from a strategic perspective, periodically offering discounts can have a negative impact on your long term success—especially for course and group program creators.
Here, we’re digging into the reasons why discounts are a very flawed way to encourage people to make those purchases and the alternative tactics that can be just as (if not more!) effective at incentivizing people to buy.
Danger #1: It Trains Your Audience to Wait
When you discount your offer periodically, you are training your audience to wait for those discounts—and even to expect them.
Why would they ever pay full price if they don’t have to? Prospective customers will simply wait until the next time your offer comes around and it’s discounted.
Plus, when course creators send out discounts, it’s often tied to certain dates like Black Friday or birthdays. But the problem when you tie a discount to a date is that you then have people waiting for that date.
And even when discounts are random, people are still disincentivized to buy it at your full price when they want it because there might be a discount coming out in the future.
Danger #2: Price Anchor Decreases
When you offer discounts, you are anchoring people’s price point at a lower price than the normal cost of your program. And so if they see something higher than their expected price, it feels far more dramatic than it probably is. But that’s just where their price point is.
Even if the value of your program is so much more than what you’re charging, they’re still seeing the value in the price. That’s now where their value and price point is set.
Danger #3: It Erodes Urgency and Trust
Sure, when you offer a discount as a limited time deal, there is some incentive to get in during that discount period (customers need deadlines to act). But if your audience knows that you have other discounts coming out later, they can also just wait until they get that.
Of course, if you were to say “this is the only chance you will ever get to pay this price” and you stand by that, that would be much more compelling. But if people know you’re going to offer it at a reduced price again, it takes away the urgency factor, even if it is a limited time offer. On top of that, it really starts to erode people’s trust in what you’re saying.
Before joining the Circuit Sales System, CSS student Krista fell into the trap of offering random discounts and was rapidly losing her integrity—see her full story here to find out how she turned it around.
Danger #4: Excitement Wanes
When you offer your program for, say, 10% off the normal price, this gives the perception of your course not being worth as much as you said it was.
And if your audience sees that you’re offering 10% off, they’ll often just wait a little bit longer to see if it gets discounted even more. We see evidence of that in our own inboxes every single day. One week you’re getting an email for 15% off sweaters, and the next week you’re getting 20% off emails. So what is the incentive to buy now?
It actively encourages customers to wait around for a better discount, with their motivation to actually make that purchase decreasing day by day.
To encourage more purchases, you want to capture people at their peak excitement. We know that motivation is at its highest when our customers (or soon-to-be customers) first interact with us. And the longer that we make people wait to get a better deal, the less they will actually care about making that purchase to begin with.
With consumer products, there’s always the chance that the sweater you want won’t be in the size, color, style, etc. that you want. But with an online program, that doesn’t apply. That makes it even more dangerous to play the discount game as a course creator.
Danger #5: It Sours Existing Relationships
We often see people advertising their “last day of sale”, and then suddenly, two days later, they’re launching another campaign for another sale, which is even steeper! This kind of contradictory messaging is not only disingenuous, it disincentivizes people to buy and certainly doesn’t fill them with trust in the brand.
And the people who bought your program at full price and are now seeing these messages everywhere they look? Well, they’re probably going to be a little…peeved, to say the least.
The people who took action and paid your full price are extremely valuable customers. And if they suddenly see that you’re running discounts, it not only sours your relationship with them, it also makes them think your program is not as valuable as you told them it was.
What we’re doing when we run a discount like that is effectively penalizing the people who purchase right away, thinking, “I get this, I want this, I have faith in you, I’m giving you my money.” This is *not* a great way to do business and it’s certainly not a great way to build a happy, healthy community.
Alternatives Ways to Encourage Sales
Okay, so now we know we need to be a bit more cautious around offering discounts… what are we meant to do to help drive sales? Luckily, there are many effective alternatives to discounting your products. Let’s take a look…
Tactic #1: Offering Limited time Bonuses and Extras
One of the things we do with our programs is offer limited time bonuses and extras for people who make a purchase at a certain time. For example, if someone buys our program at a certain time, they’ll get access to an extra bonus course with content that is super valuable, compelling, and a topic that our target audience is interested in.
This is a great alternative to discounts because instead of taking away from the price, you’re giving more value. That means you’re not then hurting yourself and your bottom line by offering the discount. Plus, you’re offering something that you’ve created that you can sell again, and again, and again.
We want to treat every person that makes a purchase like gold, but we also want to keep incentivizing people. So you might want to think in terms of highlighting bonuses and then taking them away to avoid souring any relations with people who’ve purchased before.
When you’re doing these limited offers, you’ll also want to make sure you’re just doing them just a few times a year—not so regularly that your customers start to expect it. There should be a “surprise and delight” element to it.
Sometimes within our courses, we’ll do a book giveaway to our existing students just for fun, which no one really expects. We also do some student-only events throughout the year with our programs, which we talk about to people who haven’t yet purchased the program.
It’s all work that we’re doing anyway, we’re just reminding people that if they take action now, then they’ll join in time to take part. And so it creates that extra urgency of “Oooh, I want to be a part of that event, let me do this now!” versus putting it off. Plus, everyone gets access to it, which avoids penalizing people who purchased earlier.
Tactic #2: Changing Your Payment Structure
Are there opportunities to change the payment structure of your offer, but make it for a truly limited time?
For example, in our copywriting course, we offer a one-part payment or a three-part payment and then in the third or fourth sale sequence, they have one opportunity to do a six-part payment. And that’s the only time they ever see the six-part payment.
You might be thinking “Well, what’s the difference?” but when our prospective students are in that email sequence and see the three part payment plan, that might seem too tough for them. But they might be able to make a six-part payment work—in fact, we see people purchasing the six part payment regularly.
Yes, the total amount of the six part payment is more than the three part payment but being able to spread it out over six months instead of three months is enough to motivate them to take action in that moment.
Tactic #3: Messaging the Value of Your Offer
Oftentimes, if people aren’t buying and you’re in the place where you’re tempted to offer a discount, it’s likely because people aren’t understanding the value of your offer.
They’re not yet ready to pay because they aren’t sure if the price point of your offer is going to be worth it. Is that a good investment for them? Is it going to have the return that they want? Are they going to get the transformation that they want out of your program?
If people don’t yet understand what the value is that you’re charging, that’s where there’s an opportunity to message the value of your offer in a way that shows people exactly what kind of deal they’re getting. Forget offering discounts—you can make people feel like they’re getting a deal at your regular price.
When business owners aren’t making sales, they often go to the place of, “Okay, how can I change the pricing or make people want to purchase” but price is rarely the reason people don’t buy.
Yes, there can be scenarios when it’s genuinely not the right time for someone to buy, in which case you have to give them additional opportunities to purchase in the future. But most often, the main reason people don’t purchase is because they don’t yet want it badly enough.
People say “it’s too expensive” as a justification for when they don’t want something enough to pay that price for it. But it’s not their job to want it—it’s our job to help them understand why they should want it and to break down the incredible value of our programs. Because if they want it badly enough, they *will* purchase it.
We certainly don’t want to dissuade you from having special promotions (in fact, we’ve given you some ideas for them!). But periodically popping up discounts here and there is a lot more risky compared to offering customers a one-time promotion at the beginning of your interaction with them.
The much more effective way to do it is to give people the powerful, insightful messaging that makes them want your offer right away. That is how you build an irresistible business with irresistible products. And that’s how you build a community of people who not just know you and like you, but also who trust you as a business owner.
Read More
In this value-based pricing guide for course creators & group coaches, we discover how providing the value of your program gives people a better insight and more context into your offer, allowing them to make a more informed decision.
Watch More
In this Energize Your Online Business podcast episode, Nicki and Kate explain why, as a course creator, you might want to think twice before offering your customers discounts in the hope of boosting sales…
Your Turn!
Which (non-discount!) tactics will you use to encourage more sales in your business? Let us know in the comments below!