For the past decade, I avoided any sort of discounting in my business like plague.
I was told by my mentors that if I offer a discount, my customers will never buy the product at the full price again.
That I’d only attract bad customers.
That websites like Udemy are places to avoid, as you can’t make any serious money by discounting your products by 80-90%.
That it hurts your brand in ways that you can’t recover from.
So in my previous business, I avoided discounting without a second thought.
But over time, I realized that the mindset of “I shouldn’t do this because someone told me not to” really held me back.
I learned that the assumptions that I made in building my business were often not true.
A great example were Black Friday launches – I used to hate the idea of them, but last year, our $$60,594 Black Friday launch (you can read the full launch report here) ended up being our most profitable launch of the year.
So I said screw it, let me get my own data and see for myself.
Why should I just blindly believe something I was told?
Where would the fun be if I wouldn’t test things by myself?
What if my mentors had blind spots themselves that they never addressed?
What if things weren’t as black and white as I thought?
So, I carefully and strategically implemented discounting in our business in a number of ways, and learned that it wasn’t such a bad thing after all.
Quite the opposite, strategic discounting can be a growth multiplier that can 2x or 3x the annual revenue in your business, if done the right way.
Over the past year, we’ve performed countless discounting tests, with different products, different launch models, through cold advertising and our e-mail lists, of all sizes (we tested everything from 10% to 70% discounts) and different stages of our funnels.
Throughout this process, we debunked the 5 discounting myths that I used to believe in, that held me back from further scaling our business.
Discounting Myth #1: Your customers will only buy if there is a discount
I was told that by offering discounts, your sales will tank when you’re not offering a discount.
We’ve found that to absolutely not be true, at least in our online parenting business.
Because when a parent has a big issue they’re unable to solve by themselves, they’ll happily pay to solve it.
They’ll pay $30, $50, $70 or even $90, if the pain is big enough. They won’t wait another X months until we offer the product at a discounted price.
The pain of sleepless nights, guilt, hopelessness and countless family arguments is bigger than the pain of pulling out the credit card.
Quite the contrary, when the pain is big enough, our customers are happy to pay regardless of the price, and they’re excited to make their pain go away.
I call this “the natural urgency principle”.
Here’s one example of how it works in our niche:
If your kid doesn’t listen to you and follow your instructions when you say something to them once, twice, three times…
When you have to raise your voice and they still ignore you…
And you only get their attention once you start threatening them with punishments…
The underlying pain and guilt is difficult to bear.
You know you don’t want to raise your kids that way. You hated when your parents raised you that way. But you don’t know what else to do.
You’ve read countless parenting books, you tried googling to solve your problems, but all the solutions you’ve found are generic, impractical or simply don’t work.
So, at one point, you hear about our website, you check it out and see that we offer a product that helps you raise your kids without yelling, with a proven framework that has worked for thousands of parents.
You don’t think twice – you pull out your credit card and make the pain go away.
You’re experiencing natural urgency through the pain that keeps bugging you every time you need to yell at your kids, or threaten them with punishments.
I’ve found the natural urgency principle to be present in quite a few niches.
The “damn, I need to get in shape for summer” realization in January…
The upcoming job interview for your dream job…
The exam you’ve failed two times that you have the final chance to pass…
In many niches, people don’t seem to care about a 20% discount that much as they’ll happily buy the product without the slight price reduction.
Of course, when there IS a discount, they’re still more likely to buy – especially if there’s some sort of a deadline that generates additional urgency.
But they won’t NOT buy just because there isn’t one.
Discounting Myth #2: Discounting will hurt your future launches
Another one of our concerns was that if we did a big sale, our next few product launches would tank. This was a much more reasonable concern than the first one.
It was also the #1 concern we had in mind when planning our Black Friday launch.
Since we were planning sales as high as 50-70% (which we’ve never done before), we were afraid of the impact those would have on our business.
What if we do a mediocre launch on Black Friday, but shoot ourselves in the foot for the next few months?
We weren’t as sure about this one, but said to ourselves “If we don’t try it, we’ll never know”.
After the launch, I realized that this concern was also unfounded.
First of all, our launch generated $60,594 revenue, which would already make the launch worth it, even if our sales tanked slightly over the future months.
Second of all, we planned for this and tried to minimize the negative impact of discounting by using strategic discounting.
We took a look at our launch calendar and made sure that we weren’t relaunching the products that were offered during the Black Friday sale over the next few months.
Instead, we decided to launch new products that we’ve never released before and weren’t discounted during Black Friday.
So just a mere week later, we launched a new product.
Coming straight out of a Black Friday launch, I was a bit worried that it would tank, but it didn’t.
It generated $11,464 in revenue, which was a solid launch, and we didn’t notice any red flags on any of our launch metrics.
And the future launches performed just as well. In January, another new product we offered to our audience generated $97,993, which was a new record for us.
By that time, most of our readers completely forgot about Black Friday, as they were thinking about the new year and how they want to be better parents, and the day-to-day issues they experience with their kids.
Of course, things could have gone in a different direction. If we weren’t strategic with our discounting and we simply relaunched the same products over and over again, doing a big discount could make a big negative impact.
But through the strategic rearrangement of the launch calendar, it didn’t.
Discounting Myth #3: Discounting brings bad customers
This is another common argument against discounting, and we’ve actually experienced it first-hand back in 2020.
We were experimenting with building a business in the fitness industry, and did a Black Friday sale for our fitness membership program.
Later on, when we shut down the program, the Black Friday customers were the most vocal, most entitled, and most difficult to deal with. So I’d say that there is some truth to that, and it might be a bit niche-specific.
One thing that we didn’t have in that niche yet were deep relationships with our customers, as we had just started that business a few months ago.
On the flip side, after running the Black Friday sale in our parenting business, we didn’t notice anything out of the ordinary – no problematic customers, no increase in refund requests, nothing. The aftermath of the launch felt like an ordinary launch.
Through our discounted offers, we were able to serve new customers with that launch (overr 50% of our customers during the Black Friday sale haven’t bought from us before), and they were grateful for it.
Perhaps some of they will even buy more products at the regular price in the future, now that they were able to experience our products first-hand.
My conclusion is that “discounting brings bad customers” is niche-dependent.
If you don’t use discounts as your MAIN business strategy right off the bat… If you take the time to build a customer base of raving fans… If you only do big discounts strategically, at specific times of the year…
Then you likely won’t build a bad customer base. But you might just be able to help hundreds or thousands of people for whom your products were out of budget outside of sale periods.
Discounting Myth #4: Discounting can’t generate any decent revenue
For a long time, I believed that selling low-priced products makes it hard to build a sizable online business.
And I still agree that if you have a business where you can sell your products for $500, $1k, $2k or more, it’s a lot easier to build a 6-7 figure online business, than by selling $20 products.
But this false belief held us back when we initially started our parenting business.
We sold our courses for $200 as that’s what we believed they were worth. However, after our launch to the initial email base of raving fans of the expert we worked with, the sales tanked.
When we turned on Facebook ads, we got practically no sales. So we decided to run an A/B test: We sold the same course for $50 and $100, and spent a few hundred dollars on ads.
The results were astonishing:
At $100, we got zero sales.
At $50, we got 20.
This helped us realize that we shouldn’t aim for prices that we thought were right – instead, we should create a pricing strategy that works best for our customers.
By the way, there’s a great 200-page e-book on strategic pricing that you can download here.
For a long time, we sold our courses at around $50, as we really didn’t want to go any lower than that.
We were afraid that by selling products at $10 or $20, the math just wouldn’t be in our favour.
Then, over the last quarter, we smashed that limiting belief…
It all started when we sold an e-book with 137 ways to spend quality time with your kids for just $10 (reduced from $20) during the fall school break. At the time, we already had a solid upsell strategy in place, so we were able to increase our average order value by 72%.
That launch generated over $8k. We sold 500+ copies of our e-book and our upsells drove the AOV to $17?. This made us realize that it was possible to bring in decent revenue even with a lower priced product.
The pivotal moment that really helped us see the value of discounting came a few weeks later, during our Black Friday Sale.
Even though we used discounts of 40-70%, we sold such a large volume of our courses that we ended up generating over $60k, making it our biggest launch to date.
Finally, in January, we had a $97k launch selling a $31 product to our audience (which is lower than the $50 minimum price of our products we used to stick with).
Just like that, our limiting belief that discounting and low-priced offers can’t generate decent revenue was absolutely smashed.
Discounting Myth #5: Discounting is worse than closing the cart
Our final hypothesis that we wanted to test was that discounting is worse for urgency than closing the cart.
For a few months in our business, once Facebook advertising started performing worse than it used to, we decided to close the enrollment to our products, as that’s another thing I was taught to do – it’s supposed to generate a lot more urgency.
But to be honest, when I look back through the launch reports for the past year, I can’t really say that either way of generating urgency worked better or close.
The benefit of closing the cart was definitely that the AOV during our launches was higher, but in turn, we got less sales, so it all evened out.
Additionally, by closing our products for enrollment, we couldn’t really take advantage of selling our products through Facebook or Google Ads (we tried a waitlist funnel, which didn’t really work out).
And the customers that felt their “natural urgency” – that had a big fat problem that they wanted to solve – came to our website and didn’t end up buying anything.
In the end, we realized it’s better for our business to keep all of our products open at all times and use discounts during our launches of new courses and relaunches (typically a 20% discount).
This way, the urgency still worked exceptionally well, AND we could profitably start advertising and serve potential buyers with urgent issues.
Bottom line: Discounting can be a great growth multiplier for your business, if used strategically.
So don’t be afraid to play around with it. Try a 20% discount at your next launch instead of closing the cart and see how it goes. Or, try a 24-48 hour sale of one of your products. Give that Black Friday sale a shot this year if you haven’t yet.
Because after all the testing I’ve done over the last year, I have no good data that would show me that discounting hurts your business – and a ton of data that says it can help you grow it tremendously.
-Primoz
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