Discount Promotions

A discount turns wants into halves.

Why pay more when you could pay less?

Understanding discount offers.

Fundamentally, free and discount offers operate very similarly from a money model perspective.

Basically, they create a perceived value discrepancy that on its own can drive action.

That being said, I personally am not a big believer in marginal discounts, say 5 to 25% off. It's just not enough to drive real behavior, in my opinion, and basically just cuts into margin. Instead, we're just going to be talking about massive discounts, 50% or more. Those are the types of numbers that people respond to. And they drive action from a population that otherwise wouldn't act. And that's what you have to accomplish with freer discount offer.

It has to get people who wouldn't otherwise consider it to respond. No, most of the time when

talking about discount offers, they will only make up a component of your offering, not the

entire thing. While there are a handful of notable exceptions, in most instances, a discount offer

is a piece of the thing, not the entire thing. With hope, that makes sense. If it doesn't, the examples will illustrate it. Four ways to display discounts. So let's imagine we start a lemonade stand. I say to you, I want to try one of these discount offers out. What do you think? I think we'll be able to get more people to respond to my efforts with some sort of discount, but I don't know where to start. You might say, great question. You're going to have to test it, but I'll show you my framework that I use to test discounts. It'll automatically get you thinking differently about how to display offers from here and out. You see, there are four ways you can display a discount. Knowing them is important. People respond differently to the same discount display differently. There are probably others, but these are the four that I find most common and have been

tested and used effectively. Let's look at our own business and try all four.

You'll notice that sometimes it fits and other times it doesn't. Whether we are selling

something premium or in higher volume, the price of the offer many times informs what will make

the most sense for us. Let's imagine we have an

ultimate lemonade bundle that is three bottles a day for $30. The numbers don't matter, by the way.

Well, that's what we're going to promote four different ways. New client special, first week of

lemonade, $29 instead of $210. Number one, percentage off. New client special, 87% off first visit. Number two, absolute amounts off.

$181 off first visit, normally $210.

Number three, relative equivalent off. A, save a steak dinner.

B, less than going out to lunch.

Four, simply the discounted price. $29. B. Less than going out to lunch. Four. Simply the discounted price.

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