Sunday, 18 January 2015

Published 21:39 by with 0 comment

4 Steps to Become a Discounting Expert

Last time I mentioned the squash court owner who found a right amount of discount to fill their unscheduled lunchtime gap. Most service providers aren’t in such an obvious situation. Unscheduled appointments tend to scatter more randomly around the whole day. There are four key things to look out for if you want to become a discounting expert.

1. Do your market research
You might think market research is a hard task that only senior professionals can do. Actually you just need to take a look at your competitors a bit, doing something called a competitor analysis”. This varies based on the size of the business, but you really just need to answer the following simple questions:
Which service providers are your top 5 biggest competitors?
Are your prices lower or higher than theirs and why?
How do they discount? (Do they use a daily deal website or an online appointment scheduler?)

2. Know who you want to attract
To engage an effective marketing campaign, you need to do some targeting. A first step could be to target the customers who come back only rarely or visited you only once. To retain clients is always cheaper than continuously trying to get new people in, because you do not need to spend more and more on advertisements. With their loyalty increasing, your advertising cost will be decreasing.

3. Choose services wisely
When doing your market research, you will see that similar service providers are promoting very similar services. Hairdressers are promoting mostly haircuts and blow-dry, yoga teachers group yoga classes and so on.

If you want to catch the eyes of your potential customers, you need to be more original! Take a moment, sit back, and think about what your clients want from you. An average hairdresser sells haircuts but a unique hairdresser offers party hairdos or “luxury hair repair treatment”. Most yoga promotions are about the yoga classes, you can be unique and offer “balanced body posture” or more customized, tailor made deals. Choose a service that is not overused on promotion platforms and also defines your image a bit.

4. Overdiscouting and Underdiscounting
To set the discount bar on the right level is the art of pricing. The best way to achieve success is to test your promotional prices. You do not want to sell your services cheap, because it won’t create profit and will also cheapen your business’ image. You also do not want to give too little, because it won’t create the necessary buzz and new clients won’t show up. A safe lane in discounting is to be found between 30% and 75%.

How can you test this? Use pen and paper to simply put it on your front door. Make two variations. First week try a lesser amount of discount (e.g. 30%) and on the next promote the same service with a higher 50%. You can also add that it is a limited offer and you will only sell 5 or 10 of it. Don’t forget to say that this deal is applicable only for appointments between 8am and 1pm (or any other off-peak time period).

Try it! It will work out just fine!

About the Author: Balazs Monos is the founder of Reserveline, a marketplace that lets service providers sell their unscheduled appointments to potential customers at discounted prices. Balazs has spent 7 years in sales and marketing in both B2B and B2C fields. He offers free consultations on client acquisition and pricing strategy for local service providers from and around London.

Also find him on Twitter! @reserveline


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