Most businesses practice price reduction during this period, but some of them, in fact, inflate prices beforehand and then get them back to normal when Q4 comes, although they promote it as huge discounts. If you remember, JC Penney was practicing this approach for some time. Customers new about this scheme and some were disgruntled, so the company management decided to stop doing these “sales” and just keep prices at their normal level all the time. What do you think this move brought JCPenney? More revenue? More customers? Well… in fact, it brought it $985MLN loss.
What does this story mean for you as an entrepreneur?
That people love the psychology of discounts and deals. That’s why Black Friday season is so hot for most businesses. I doesn’t mean that we recommend inflating prices and then giving “discounts”. On the contrary, we are for fair play. What we recommend is not to miss out the opportunity to give your customers what they want and grow your revenue. But since everyone else is eager to do the same, you need to craft a really special offer to stand out. The best way to do it is to take human behavior into account to increase the value people should see in your product. That’s why today I’m sharing with you a few tricks you can try applying.
Try using higher-priced anchors when leading a user to a catalog page. After seeing a more expensive item (no matter what it is) people are more willing to pay the price of the item they’re looking for. In other words, if you sell t-shirts, you can try leading a person not to a product page, but to a catalog where they will see more expensive items. You can also try showing things that cost more in the upselling options. It’s pure anchoring, and you can use it to create a context around your product.
Use scarcity. It’s another psychological trick that always works. You can say that the sale time is limited, or the amount of coupons, or the amount of items you sell. Remember, that there’re different kinds of scarcity and they work differently depending on the niche. If you sell something basically everyone buys (e.g., food or hygiene products), you can use “high-demand scarcity”. In this case you can say that this product is so popular it’s being sold out extremely fast. The other kind of scarcity works better for products that help to make a statement or emphasize exclusiveness (e.g. luxury watches, jewelry etc.). It’s called “limited-edition scarcity”. For this type of products it’s better to say that the time of the sale is limited or the stock is limited apriori.
Give sequential discounts. For some reason, people love segregated gains, that’s why 30% off + 20% off work better than 50% off. Some entrepreneurs prefer giving the second part of the discount during checkout, others create a pop up message or send it through a chat bot installed on the website. Get creative and find your way.
Even though Black Friday is a time of big sales and a lot of companies attract users by giving discounts, don’t forget about the story behind your product and the emotional part of the creatives and ad copies you use. Give more reasons to buy your product than just a reduced price, increase the perceived value, and you’ll be surprised how much more profit you can generate.
Hope you’ll craft the best offer and skyrocket your sales and profit during this Q4!
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