Tuesday, 22 January 2013

How To Make The Sale Promotion Work

I have a reputation for the phrase "Put up your prices, now!"

It makes me cringe when people slash prices to get more sales. (On that point the slashing of my Kindle book prices did prove me wrong - see When Lowering Your Prices Actually Works!)

However, there is such a thing as a 'reverse sale' - well, that's what we call it. My point is that it works well for you and for the customers... as long as you don't do it too often.

So, here's how it works. I will use the online Directors' Centre Business Club as a live example.

Currently the price is a ridiculous £200pa (Ridiculous because of the benefits... ridiculous because of the work that goes into finding the content.) 

We have decided to set a new price at £400pa - still excellent value but then I would say that.

So, we are offering new subscribers the opportunity to join at the old £200 price  This is a bit of a squeeze and that makes us feel a little uncomfortable (because we normally sell high value premium product where such tactics are not appropriate or effective).

So, we announce the price rise date: "1st February will see prices rise 100%" and we offer/push/promote the old price to potential new subscribers at the old rate.

Clearly, the offer is time-sensitive. 

We send a series of emails, when the drop dead date is 14 days, 7 days, 3 days and 1 day away. Almost all the sales come on the last day. We sometimes extend the 'sale' by a further few days and this will generate even more sales: "Sale/Special/Promotional price extended by a further 48 hours..." This tactic also works.

The result is that potential subscribers who have been dithering will make a decision to sign up or not bother. If they do sign up they get it at a great price.

For us we get a rush of new subscribers. And we are able to put our prices up in the knowledge that we have given an opportunity to a selection of people to buy at the old price.

I wouldn't quite describe this as a 'win-win' but the 'reverse sale' forces people's hands (a good thing) and it enables us to pursue our long-term goal of charging premium prices and delivering premium value for money.

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