In class the other day, a student asked why we see companies offering big discounts at trade shows.
It happens not only at trade shows. We often see great deals if we’re willing to make an immediate decision. Go see a professional speaker and at the end of the talk he or she will likely have product to sell in the back of the room … deeply discounted if you purchase today.
Of course, the discount is intended to get you to purchase immediately, but it’s more than that. These companies believe, probably correctly, that if you don’t purchase now you will likely never purchase. Hence, any incentive to get you to act now increases their sales.
However, you rarely see this at retailers. Imagine walking into McDonald’s and they say, if you buy today you can have a Big Mac for 50 cents. Almost never happens. Because once you’re inside, you’re going to buy something from them. By selling you a deeply discounted product they take money away from themselves.
These deeply discounted “act now” deals work best when the potential customer is in a unique place for them, a place they are not likely to be in again for a while. That way, if they want this great deal they have to act now.
If you are contemplating deep discounts to get buyers to act quickly, ask yourself, are you credible? If you say to a potential customer, I’ll give you 50% off if you act this week, what does the buyer think? If the buyer waits more than a week and then offers to buy from you at the previous price, will you reject it? Probably not and your buyers know it. Hence, it’s not credible. In most situations, deep discounts to act now is just giving away money.
Also ask yourself, would I win this business anyway, a little later but at a higher price? If so, it may be in your best interest to wait out the customer. (Of course you’re always at risk of losing the deal to a competitor.)
Deep discounts can motivate buyers to act quickly, and it is sometimes in your best interest to do so. Just be clear about your expectations if you choose to try this tactic.
Photo by supa_pedro