Discounts are Bad, Promotions are Good!
This is one of the most important bits of advice you will ever hear. 10 years ago I was shown an excel spread sheet on the effect discounting has on your business. frankly I did not believe it at first assuming it results of a survey, but I soon found out that this spreadsheet was no statistics or opinion, but was mathematical calculations. That day I learned a very valuable lesson that I have never forgotten, and I would say its in the top 5 reasons why I have been successful. Anyway, watch this and take note!
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Can discounts really be such a bad idea? Yes they can, and in this video I will show you why you need to avoid them at all costs. I will share a concept with you that will make you look at the whole business of discounting in a very different way.
You can also find out about net margin and what it means. Every business should aim for at least a 30% profit margin, and since profit is the only reason we are all in business it makes sense to protect that margin as much as possible.
In this video I’ll go through the process of figuring out your profits with and without a 10% discount – you’ll be amazed at the difference. If you think that a 10% discount means 10% fewer profits, think again! This video will also reveal why a 10% increase in your sales price can mean you enjoy 25% more profit. Once you understand how this works you’ll wonder why you didn’t see it before.
Remember this piece of advice too. Being busy doesn’t necessarily mean you have a successful business. It’s all about profit. If working harder does not produce a higher profit margin for you and your business, it isn’t worth doing.
I’ll also explore the benefits of promotions and bonuses as opposed to discounts. These are of little cost to you but they have a high perceived value to your customer, and they enable you to stick to your normal selling price too. They also make you stand out among your competitors, which can bring in more sales as people choose you rather than anyone else.
Finally I will give you eight ideas you can use in your own business, to unlock the knowledge you have that everyone else wants.
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33 Comments
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16 days ago
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MARK
210 days ago
WOW! nice! this was also told to me by airtech a business it consultation firm that giving discounts doesn't equate to sales on my business. I thought those were just a theory. Thanks for this it really shed a light.
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Pdf SE
1 years 172 days ago
You are right. I also thought that discounts are not always in favour of the companies who want to increase their salles. People just think that the product is worse and do not buy it. The best varient is when the product is of middle price.
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Claire Bartlett
1 years 246 days ago
Great thoughts and ideas- I will be marking up all my products by 10% now!!
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Caroline de Jong
2 years 18 days ago
This is very interesting and quite an eye opener. thanks for sharing this going to put into practice straigh away!
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