Ryan Dohrn argues discounting erodes product value and makes it hard to raise prices again. Companies that slashed prices during 2006-2009 still can't get back to original rates. Instead, use loyalty programs: selling to existing customers succeeds 60-70% of the time versus 5% for new ones.
Hey friends, Ryan Dohrn here, your sales coach. Thanks so much for watching all these videos. I hope you'll find them to be very, very helpful. In this video, we're going to be talking about discounting. Oh, discounting! Ha! Don't discount. Discounts during these type of situations equal death, friends. Don't discount. You discount, you might sell a little bit short-term, but you'll never ever get back to that regular price. Well, you know, Ryan, during the Great Recession, we discounted and we did fine. Really? Well, then you should write a book about it because I have hundreds of examples. Well, I mean, hundreds might be an exaggeration, but I have a lot of examples of companies that slashed prices in '06, '07, '08, '09, and they're still fighting today. Okay, almost 10 years later, they're still fighting. Or I guess a little bit more than 10 years later, they're still fighting to get their main price back. Don't offer discounts. Instead, reward customer loyalty. Go to those customers you currently have that you need to re-sign and offer them a loyalty program. Hey Bill, in the past you spent $20,000 with us. We'd like to offer you a 10% credit towards your future spending with us, or something like that. Create loyalty programs. Okay, for new customers. Okay, now this is an idea for some of you out there in the advertising sales business where I spend a bunch of my time. Instead of offering a discount, Say it— say something like this: buy 3 ads and get 1 free. So buy 3, get 1 free, rather than $50 off this ad. Buy 3 of them and get 1 absolutely free. It's a better program. It rewards people for loyalty. Now, in all of your business, whether you're selling software or insurance— and all you folks out there are selling a lot of different stuff— think about this: you are 60 to 70% more likely to resell an existing customer You're only about 5% successful in selling new customers. So create loyalty programs, don't discount. In my opinion, discounting equals death. I'm Ryan Dohrn, your sales coach. Find out more about me online over at ryandohrn.com. My last name is D-O-H-R-N, ryandohrn.com. Stay safe out there and be well.
