If you have a business, then your ultimate Black Friday question is: shall I discount my products or not? Do I have other ways to attract customers than cutting my prices?
These are very good questions.
A discount can be a great way to accelerate your sales but you also run the risk that you devalue your products for the long term. So does it worth to experiment with discounts at all?
Well, the answer for this - and so many other questions - lies in your brand strategy. In this post, we’ll go through multiple scenarios that can help you bring the best out of the Black Friday shopping craze.
THE BRAND THAT NEVER DISCOUNTS
When I moved to frosty Montreal - where -13ºF (-25ºC) winter mornings weren’t uncommon - I was desperate for a toasty warm parka.
Many of our friends recommended Canada Goose for winter wear. Now you must know that their parkas are extremely expensive ($600-$1200).
One thing for sure: I was determined not to pay my entire first salary on one piece of outerwear, no matter how well it would protect me... even if I accidentally end up at the North Pole. Hence, I started to hunt for deals online. Soon I found a site that offered the same coats for half the price. Sweet!
I decided to first try on one at a department store. I asked the sales lady why they don’t offer the same deals as that webshop. She said:
“Oh dearheart, we NEVER discount our product. That webshop is a scam.”
As it turned out the Canada Goose brand never discounts its products. Not for Black Friday, not for Boxing Day. Not even in the middle of an armageddon. But a whole bunch of business based their strategy on mocking the famous brand, and making parkas that look almost the same except that they use crappy materials.So I didn’t buy Canada Goose at the end - my wallet was grateful for the decision - but I’ve learnt an important branding lesson: Your pricing strategy determines how your customers value your product and your brand.
YOUR PRICING STRATEGY MATTERS
Canada Goose, Apple, Tesla… They never offer discounts. If you want a cheaper iPhone, you have to buy an older model or play the “Craigslist Roulette” for a used one (in this case you can end up in a dark alley so beware).
How do we see these brands? We see them as exclusive, luxury brands even though a phone, a parka or a car shouldn’t be considered as luxury. They are everyday objects we need to live our life.
Is this a bad thing?
EXCLUSIVE PRICING CAN WORK
Well, if you want to buy the newest iPhone then yeah, it kind of sucks ($1000 for a phone, are you kidding?!).
But if you want to build an exclusive brand, a strategy with higher prices will be your best friend. By not underpricing your product or service, you make an important statement: buy this when you’re ready for a top of the top treatment.
OK, but what if my competition offers discounts? Shouldn’t I follow their example? - you might wonder.
That competition might have a completely different strategy than you. So never set your prices based on theirs. Know your own business value and deliver exceptional experience for your customers.Remember: selling a great product for its deserved price is doable. You’ll always find customers valuing quality and exclusivity. On the other hand, selling a mediocre product for cheap but pretending to be the new Tiffany & Co. is a straight way to a Branding Disaster.
OFFERING A COMMODITY
There are markets however, where higher prices are considered insane. Who would buy a $100/roll toilet paper or bottled water for $200?
These are commodities that we rarely consider luxurious no matter how great they are.
Does that mean that discounts work here better than for exclusive brands?
Not at all. People rarely stay loyal to commodities. So they might buy your discounted product but the next month they will buy another brand offering lower prices.
Consistent, good product quality is much more important in this case than time-to-time discounts. As we use these products every single day, their good or bad quality has a huge impact on our life.
Take Bulgarian company, Zewa for example. Back when I lived in Hungary, I used to buy their tissue paper. I didn’t wonder a lot about their prices, I just needed to blow my nose and they had a good quality product that never hurt my nose after three miserable days of flu.
Now here, in Canada I would pay double for a brand that could offer the same quality product instead of thin and rough Kleenex.
Surprise your customers with a superior quality instead of pushing the price down. This way you can gain loyal followers who will fill their suitcases with your product - like I do with Zewa every time I come back from Hungary.
IF NOT DISCOUNTS THEN WHAT?
It’s a justifiable question to ask: what else can you do if lowering prices doesn’t work for your brand? How can I convince potential customers to click on the purchase button. Here are a few methods and brands that mastered them to a T.
#1 - BONUSES - MARIE FORLEO B-SCHOOL
Marie Forleo’s B-School is an amazing educational program to learn all the nitty-gritty details of online marketing. But it’s quite pricey for many starting entrepreneurs. Still, Marie does not discounts her course. In fact, she even limits the enrolling time to only once a year.
This ensures that she can offer the best support for her students.
For me, the final push to join B-School was the amazing bonuses. Not just Marie’s bonuses, but all of her affiliates offered something extra for those who subscribed through them.
What bonus can you add to your product that will help your customer reach their goals even sooner, easier or in a more joyful way?
Offer these little extras and be very strategic about them. For example, offer something for early birds that’s only available on launch day and then goes away for good.
#2 - EXCLUSIVE EXPERIENCE - AMY PORTERFIELD
When Amy Porterfield offered a live marketing seminar for those who subscribe to B-School through her, I knew that I must be there. Because it’s one thing to attend a digital course in the seclusion of your home and a completely different story when you can fly to sunny San Diego and meet your business superheros.
What type of special experience can you add to your product? Feel free to brainstorm the hell out of these questions:
- Can your floral arrangements be delivered by delivery mans who sing happy birthday to the recipients?
- Can you package your cosmetic product in a way that every step of unboxing feel indulgente?
- Can your customers get a one-on-one skype call with you where you help them prepare the perfect outfit for an important event while you have sangrias and listen to Lady Gaga in the background?
- Can you organize an in person seminar for your most loyal customers where you help them bring the best out of your product or service?
Oh, I know some of these sounds a bit crazy - I don’t know if I could handle well a singing delivery service. But didn’t every good idea started a bit insane?
#3 - SURPRISES - CAUSEBOX & FAB FIT FUN
What subscription boxes do really well is the magic of surprise.
Of course, you also get the content of the box cheaper than their individual market price but this isn’t why people get hooked on the experience. After all, these boxes are still on the self-indulgent luxury side for many families.
None of us really needs one more yade-skin-rolling-gizmo or organic scented candle in the shape of a pinecone. But we need a little bit of magic. That feeling we used to have before Christmas Day when we were kids.
With FabFitFun or Causebox, the magic comes from the surprise. The brands you receive in your subscription box tend to be unknown for you. Also, in some cases you don’t even know what will be included in your box.
Soon you’ll find yourself checking the postal tracking site every 10 minutes and almost fell down the stairs when the delivery guy rings the doorbell (personal experience, apply with caution).What can you offer for your customers that would surprise them? Maybe a bonus you’ve kept secret? Or a beautiful hand lettered card like the one Inkwell Press adds to every package?
#4 - A FREE SAMPLE - SEPHORA
When you shop at Sephora - online or in store - the best thing is that there’s always a freebie waiting for you. A free sample of perfume, a mini lip balm, or foundation samples to try.
Why is this method great?
The customer can try out a product risk-free and decide if she loves it or not. Now guess which lipstick will she buy next time: the one she could try or a completely unknown product?
Of course, the one she tried and liked. And by the way, she most likely pick up that new lipstick at Sephora ‘cause then she gets a new round of freebies.Can you offer a free sample of an upcoming product this Black Friday? Think of something small but still enough for the customer to experience your next offer.
WHEN TO OFFER A DISCOUNT?
Now let’s be clear. You shouldn’t refuse the idea of discounts… To be honest, I’m going to offer discounts in my store for my older products.
The goal of this post is to show you how many other ways you can attract customers and how important it is to not follow the competition blindly.
If you decide to offer discounts:
Do it for a short period of time - e.g. from Thanksgiving to Cyber Monday
Don’t discount everything - choose your intermediate priced products or your introductory products that hooks new customers to try out what you offer. Do not discount your exclusive products or services
Discount your outgoing products. If you are in the fashion, home decor or electronics business, you’re likely going to launch new products next year so this is the time to sell your older inventory.
WHICH WAY WILL YOU GO?
Now, I’d like to know, which method you think would fit your business the best. Are you going to experiment with bonuses? Are you planning to add a little bit of magic with surprises? Or you might figured out another authentic way to attract new customers. Let us all know by leaving a comment below.