Will Discounts Destroy Your Business?

Discounting—yea or nay?

On one hand, you have a crowd of business owners who happily point to the spike in sales they see every time they offer a discount.

Then there’s the vocal minority to whom discounting spells nothing less than THE UTTER AND COMPLETE DESTRUCTION OF YOUR BUSINESS!!!

Subscriber Benjamin is trying to sort through this.

He asks:

I love your emails and applied your advice to create an email course that performs pretty well and delights my subscribers. But I have been hesitant to offer a discount like you do. Lots of people (Derek Halpern for example) say that discounts lower the perceived value of a product and hurt in the long term. What do you think?

I used to count myself among the anti-discounters.

Discounts hurt the perceived value of your products, I believed, and they train your customers to wait for the next sale before they buy.

Taken to an extreme, those statements are probably true.

For example, my wife buys occasional gift items and photo books from Shutterfly.

Shutterfly is *constantly* running discounts—they email out different sale offers almost daily.

And my wife knows that if she waits 2-3 weeks, she’ll be able to get whatever she plans to order for some massive firesale discount.

It’s worth noting that this is probably working great for Shutterfly, because they have figured out how to upsell you like crazy once you’ve decided to place an order.

For most businesses though, this isn’t a great model to emulate.

The Derek H video that Benjamin mentioned is describing a similar case study.

Retailer JC Penny once tried to shift away from continual 50% off sales to an “everyday low prices” model, and disaster ensued.

Derek H notwithstanding, I’ve largely reversed my stance on discounts.

For one thing, there’s a huge problem in that your customer are ALREADY trained to expect discounts.

Discounts have been used by nearly every business ever for thousands of years—because they work.

And every time we offer a discount at Simple Programmer, our sales and revenue shoot through the roof for the month.

Still, Benjamin’s question got me wondering about this again.

*Are* we destroying our business by offering so many discounts?

I dug into our sales for the past 12 months to find out—

And tomorrow I’ll show you what I found—and give a couple of hints for deploying discounts so you don’t trash your business…

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