All right, so this will be the first of our three sections.
Looking at different ways to manage, uh,
sales or pricing strategies. Give you guys some comparisons, some pros and cons.
Uh, and hopefully help you avoid, avoid some potential mistakes,
some that I definitely made very early on. Uh,
so hopefully after going through this,
you will be much more knowledgeable and avoid those. So the first,
the difference between a value add and a discount. So a discount,
which you all know is just a temporary reduction in the price of product,
a value add. We are keeping the original product price exactly the same,
but perhaps adding, um,
other items onto that to increase the overall value of what they're getting for
that price. Now, there's multiple ways to do this.
It could be adding another price, another product,
and not increasing the price at all,
or maybe that second or third or fourth product is significantly discounted when
bundled with the primary product. And of course,
these are usually things of equal or lesser value than your primary product.
So looking at the discounts first,
some of the things they can work in your favor is they create a little bit of a
scarcity mindset. People have that, you know, fear of missing out of, you know,
what if you know, I do want this,
this is the time to get it because I'll have to pay more later. The, uh,
next one is, it's a little bit of a psychological win.
They feel like they're winning something by not having to pay full price,
and they can certainly boost short-term sales.
How they work against you, however,
is there is a little bit of a devaluation of the product you're selling, right?
If I sell a product at a significantly discounted price,
usually that kind of signals, well,
this is what the product is absolutely worth to me. Unless,
and we'll get into this later with applications,
we're using it for a very specific purpose where we're maybe okay,
losing a little bit of money. But keep in mind, if you're doing a lot of, uh,
you know, discounts and things, especially like holiday discounts,
people tend to want to sit around and wait for those opportunities to come
again.
And then the chances of you selling that item again at full price significantly
declines. It really can impact your bottom line.
And that's where the setting of precedent comes in.
Once they see it at a discount, most people are like, oh,
I'll just wait until next time and it'll come back.
I'm not gonna pay full price. So an example I found this, uh,
very recently, uh, was this major Black Friday sale. Uh, it was a bundle,
I think of like six or seven products. Um, and,
and the whole thing was 90% off.
You're paying 10% of what these are at full price. So after seeing that,
even if you didn't, if you didn't buy and you, you know,
considered buying a product later,
what are the chances that you're gonna think that any of those are worth their,
their sticker price, so to speak?
The the value that the owner is conveying here is that it's worth
very little to them at this point.
So probably not the approach I would've taken.
So the applications for using discounts are, are non premium items. Remember,
we talked about kind of premium pricing and premium products, uh,
a few units ago.
If it is not one of those types of premium products or services that you're
trying to promote, it might be okay. Uh, the other thing we've,
we've mentioned before is a loss leader.
We're okay not making money or even losing a little bit of money on the front
end of that product. And maybe that's what the example before was going for. Um,
in order to, you know, cultivate a repeat customer later,
get those new customers in the door, get their contact info,
get them familiar with the type and the level of products or content that you
are delivering, and then hopefully convert them into, you know,
buying a higher priced product where you actually do start making money down the
road. And, and this would be similar to like an introduction discount.
If you have a membership website, uh, you'll see all the time, you know,
first month is half off or first three months for the price of one.
We're significantly discounting,
hoping that we're able to provide such a good customer experience that they
want to stick around, and then them staying later, you know,
renewing that membership, uh, buying, you know,
the next program is where we actually start to make our money.
And then of course, you know, taking advantage of the buy mode around holidays,
like, how many of you have, you know, waited until Black Friday, you know, like,
Ooh, what's gonna be on, you know, sale or whatever this weekend.
And then you buy a bunch of things and maybe half of them you don't really need
or use, but they were on sale.
Sometimes that can be a valid opportunity, but we again,
probably don't want to do that on our, you know,
premium products or services or things like coaching where it kind of, you know,
may, might not send the right signal or right message.
Moving on to value ads, and now I'm a big fan of value ads,
especially these past few years.
The big benefits are the original product retains its value.
You're not discounting it. It's like that is the price.
That is what we know it is worth. We're not charging any less,
but adding other things on top of it might give that customer or client
a potential psychological win because they're getting these other things. Again,
you can do value adds in periodic fashion as well, just like discounts.
It doesn't have to be a, you know, a year round 24 7 type of thing.
The other, uh, potential things, depending on what you're adding, um, it may,
you know, make you seem more generous to your customers.
People might like you more, who knows, uh, people like getting free stuff. Um,
and then of course you can also, uh,
use this to encourage upsells or addition additional, um,
revenue on the backend by bundling items.
It doesn't necessarily have to be upfront.
And this is something we'll talk about, uh,
coming up with our subscriptions and bundles section after this.
Well, when you're using these appropriately,
there really aren't many downsides to adding value or value add products.
Um, if you overdo it though,
it may make it seem like the original product maybe isn't quite as valuable and
you're just trying to throw things on top to, you know,
like a fire sale type of thing, right? If you're trying to sell, you know,
a $50 e-book, but you're now stacking on,
I'm gonna give you whatever this other, these other things that are worth,
you know, $300, let's say. Um, what,
what are tho are those products really worth $300 if you're willing to give
them, essentially for free for with this $50 ebook? You know, just keeping,
keeping those little, um,
things in mind of the kind of messaging that this sends to your customer.
If you were on the outside looking in
The applications for this are, you know,
you can sometimes tip someone over the edge if they're on the fence about buying
a product. And then, you know, you throw in a, a free guide or a, a cookbook or,
you know, a, a quick one-on-one call, a video package, whatever,
it might be enough to, okay, yeah, now I'm ready to make that purchase.
Using things around launch bonuses, you know, launching new products can help,
uh, build the excitement for a new product, um,
which can definitely help boost the initial sales rather than doing a launch
discount. Sometimes you can stack those two. Um,
I'm not as against launch discounts because as long as you stick
to it only being that one time, um, because then when you launch a new product,
those customers who saw that, Hey, he really meant, you know,
they only did this one discount this one time, I'm not gonna miss out this time.
And then they'll buy that new product. And again,
it does create a little bit of a psychological discount with they're getting,
uh, you know,
things either added in for free or added in at a significantly discounted
price.
So when you're picking how you want to use one, both of these together, um,
you gotta figure out what aligns best with the product and your brand, right?
If you're looking at, you know, you have a dozen different, you know, 10,
$10 e-books, $20 e-books,
maybe a short term discount or something might be just fine if you're selling,
uh, you know, things that are coaching,
especially things that are time investments on your part that are, you know,
there's an ongoing investment with each purchase.
Those are the things where personally I'd recommend a value add type strategy
rather than charging less for your time, right? It costs me nothing to,
you know,
give you access to an additional set of videos for signing up during this time
versus, you know, you know, paying myself essentially, you know, 25,
30% less for doing that work if I was, you know,
discounting a coaching service or something. So keep those mind, how much, uh,
time or effort does it take you to maybe create that value add item?
And once it's done, it's done,
especially with digital items versus how much you would actually, you know,
lose, quote, unquote by discounting, uh, items that are, you know,
your main ticket items, so to speak.
So keep those things in mind and now we'll roll into our next set of strategies.