MBA1035 Q&A Wednesday: How do I run a promotion without devaluing my product?

Hey O. Welcome to the $100 MBA show. Keeping you up to speed because business doesn't slow down with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher, Omar Zenholm. I'm also the co founder of the Hundred Dollar MBA, a complete business training and community online over at 100mba.net and today's episode is a Q&A Wednesday epis. On our Q and a Wednesday episodes, we answer a question from you, one of our listeners. If you have a question you want to ask, just email me@omar100mba.net Today's question comes from Helen. And Helen asks, how do I run a promotion without devaluing my product? A very unique question. Helen wants to know how does she run a sale, a promotion, a discounted offer without making her product look cheap? Many people do not like running promotions for that reason. They don't want to devalue the product itself. And there's a lot of big companies that never run promotions for this reason, one of them being Apple. You'll never see a computer or an iPhone on sale, but it is possible to run a promotion without devaluing your product or having that perception. I'm going to share some strategies on how to do that in today's episode. So let's get into it. Let's get down to business. Today's episode of the $100 MBA show is brought to you by Long Tail Pro, a step by step system to help you quickly discover thousands of profitable, easy to rank keywords for almost any niche. Visit longtailpro.commba and use coupon code MBA for a free trial and 30% off your subscription forever. Again, that's longtailpro.commba use code MBA so Helen asks, how do I run a promotion without devaluing her product? Well, let me share with you some strategies that we like to use when we run promotions. Number one, there has to be a rationale. There has to be a reason why you're running the promotion. If you take a look at some of the promotions that you receive from other companies, let's say your favorite clothing store, you're on their email list. You might get an email in August saying, we're approaching the end of summer and we're having an end of summer sale. Get these items at a discounted price. It makes total sense. You know, summertime is wrapping up and they want to get rid of their stock. So from a consumer point of view, it's the same product, it has the same value, it's just that you feel lucky because your timing's right when you buy it. And those who like a certain style will pick it up and use it for next summer. So think about how you can give a reason why you're running a promotion. Some people run promotions when they're going to raise prices. So say for example, you have a software company and you're going to raise the price of your software because you're adding new features or a new version and you're making a promotion. Hey, this is the last time you can buy this software at a low price. At this low price, it's the lowest price it will ever be. Grab it now because prices are going up. This is doing the opposite. This is giving your product more value. Wow. I'm going to get it at a price that is cheaper than it will be next week. That means the product is getting better and I got a steal. So giving reasons, giving a rationale to why you're running promotion definitely helps when you're marketing and you know, announcing the promotion to your customers. Number two, connect the promotion with a certain action that the potential customer has done. So say for example, somebody has attended your webinar, you can give them a special offer. Hey, you're an action taker. You attended my webinar. We appreciate that here in our company. Here's a special discount you can use that's valid for a certain amount of time. So one, you're rewarding them for being on the webinar so they see why they got the discount. Hey, they're giving discounts for those who attend their workshops. And then two, you're only offering it for a limited time. It's not open ended. So they understand that this is a special deal and it's just for them. Another promotion or discount you can offer is a discount for a certain group of people. You can offer a military discount, people that serve in the military, student discount, or even Apple, they actually have a discount for educators. They don't advertise this, but if you're a teacher, they will give you that discount. These types of discounts are kind of widely known and those groups of people will probably request it. Non for Profits is another group that will request, hey, we're a non for profit. Can we buy your product at a discounted rate? Do you have a special discount for non for profits? So this is a way for you to not run a promotion but offer a discounted rate to those who are in certain groups. Now we talked about offering discounts to those who take action like being on a webinar, but you can reverse it. You can give them a discount after they take a certain action when it comes to a sale. So there are many online stores that will give you a 20% discount on your next order when you order up to $100 or more on their current order. So they check out they bought things worth $120. They'll get an email after that purchase for a coupon that's 20% off their next purchase. You'll see this often done with shipping, too. Free shipping over a certain amount, or even free express shipping after a certain amount. So you're rewarding people with a promotion after a sale. And this doesn't devalue your products or services. It's seen as a reward for being a loyal customer. Now, another way you can offer discounts or store credit or whatever you want to call it, is through a referral program. Many companies are totally onboard referral programs because they really work. You get your current customers to refer their friends and family to your website, to your business, and when a sale is made because of their referral, they get a certain percentage of credit or a percentage of discount on their next order. This really works. And it especially works for subscription based services. So say, for example, you have a software company and Your software costs $30 a month, and you tell them, hey, every time you make a referral and you sign somebody up with your referral link, meaning we get a customer because you referred them to us, you're going to get a $10 discount or a $10 credit. So that means if they get three referrals a month, their membership, their subscription to your software is free. Pretty cool. And if this is a reoccurring membership, that means once they refer three people and they stick on, they stay as members, they renew every month, and they get that $10 off their actual monthly fee. So as long as those people stay, their membership is free. So these are great tools, great strategies for promoting your products and services without devaluing them. I feel like referral programs really incentivize people to spread the word. If you want to take it a step further, you could do what Airbnb does, where you get the discount and the referral gets a discount. Pretty cool. So when they're referring somebody to your service, they say, hey, you can get 10% off or whatever with my referral link, and both parties will get 10% off. I love that. See, the key to promoting a product without devaluing it is to show why they're getting the discount and not giving them a massive discount for no apparent reason. Sometimes any reason that is understandable will work. For example, Black Friday or Cyber Monday, people expect to get an email from you with discounts so you can leverage those days to run promotions. And that's a good enough reason for people to feel like, okay, it's Black Friday, they have to do a promotion. That's when they do promotions. Same thing goes with a subscriber's birthday. Maybe you want to give a discount on their birthday. You get the point. I got more strategies to help Helen out with today's Q and A Wednesday's question but before that, let me give love to today's sponsor. One of the first things you got to do when you start a business is acquire a business address. You needed to register your business. You needed to open up a business bank account. You even needed to register for email marketing. Yes, you need an address on the bottom of your email marketing newsletters. But if you work from home, like a lot of us do, you don't want to put your home address and have your customers show up to your door. And you don't want to spend the extra money every single month on having a business office. This is where earthclass mail comes in. They hook you up with a swanky business address and all the mail that gets sent there gets scanned and uploaded to your account in the cloud. That means you never have to check physical mail ever again. You could see it anywhere, anytime, from your phone or your laptop. Pretty cool. So cool. We signed up. We absolutely love it. And we've been using Earth ClassMail for over a year now. And Earth ClassMail wants to hook you up with a free month so you can get started with your business address. Just go to earthclassmail.com mbamonth and use coupon code MBAMONTH. Again, that's earthclassmail.com MBAMONTH Coupon code MBAMONTH to wrap up today's Q and A, Wednesday's question from Helen how do I run a promotion without devaluing my product? I shared some strategies with you today that you can definitely use, but I do want to make one stipulation. Your concern about devaluing your product is a good concern to have. You don't want to have to constantly compete on price with your competitors. That's a battle that's just not going to be won unless you're a huge company like Google where you can afford losses for years. You want to be competing on value, competing on what you actually offer your audience. Your actual customers. You want to make sure that you outdo your competition in that area. And now if you happen to run a promotion, that's great. And by the way, your promotion doesn't mean you're going to be priced lower than your competition. It could still mean you're priced higher, even with a student or teacher discount. At Apple, a MacBook Pro is quite expensive. It's still more expensive than the typical Windows computer. Just keep that in mind. Your concern is a valid one, but you should be okay as long as you're focused on delivering great value, better value, more unique value than your competition. And that could be through your customer service. That could be through your onboarding. This could be through the experience of opening your product and of course, the product itself. Thank you so much for listening to the 100 MBA show. Thanks Helen for your question. If you have a question you want to ask, just email us@omar mba net I would love to answer your question here on Q and A Wednesdays. If you haven't hit subscribe on this podcast yet, you need to do that now. By hitting subscribe, you get all our episodes automatically on your device. It also opens you up to all our archive episodes, gives you access to over a thousand lessons. Yes, we have over a thousand episodes here on the Hundred MBA show, but you only have access to them if you hit the subscribe button on whatever you're listening to. Stitcher, Overcast, Apple Podcasts, Tunein, whatever it is. Before I go, I want to leave you with this. You don't have to constantly run promotions. Some people feel like they have to have a promotion every week or every month. You can choose the times of year you want to run a major promotion and then outside of that you can do these individual things I talk about whether it's the referral program or rewarding somebody for an action they take. Something that's user or customer specific. But don't feel the need that you have to run a promotion for every single holiday that happens. Alright, thank you so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care. Sam.