Invest in Clients with an Appreciation Sale

Earlier this week, I talked to a prospective member about our new Warrior group. He said he would be interested in joining but wanted to make sure I would not make him discount his services. He was concerned such a thing would degrade his brand and he didn’t want to do that.

I get this all the time. I took a deep breath and tried to put myself in his shoes. Then I told him I just finished scheduling a three-day flash sale for 30% off a client’s next order, and it will be going out later this evening via text to 27,000 clients who opted into our texting platform.

When he asked me why I would do that I told him I wanted to show appreciation for my clients by giving them what they want. The man said I might as well go ahead and reduce my price by 30% if I was going to run that type of offer. I had to explain to him what was going to happen during the three-day flash sale and then maybe he would understand a little better why I do it.

I told him roughly 7% of the recipients of the text would act on it and bring an order in during the three-day flash sale. That would give us an additional $10,000 - $12,000 more in revenue than if we didn’t send the text. Since I already covered my fixed expenses for the month, any additional revenue would be in marginal profit, which is about 45%. Which means this text, which cost me $216 to send, would yield PROFITS of $4,500-$5,400. That math seems to make a lot of sense – at least to me.

For the most part, the 7% who redeemed the text would not be my regular weekly clients. You see, some of our best clients don’t take advantage of any appreciation discounts we offer because they really care for our business and like him, don’t want to see the company or brand discounted. More importantly, since 7% would act on it, that means 93% would not act on it. But they would still see the goodwill expressed in the text. So, it serves as a reminder for those who do not actually redeem the offer.

The guy I was talking to thought all 27,000 of my clients would take advantage of the offer. No way... I asked him to think of it like the seats on a commercial airplane. Some passengers bought full-priced tickets a few days before departure, others bought mid-priced tickets further out, and others bought discounted seats from Expedia, Priceline, or Kayak. The healthy mix of passengers fills the seats (capacity in our business) and has a blended high level of revenue for even full-priced airlines like Delta or United.

If you are still skeptical, go ahead and be more conservative. Only create irresistible offers during just three parts of the client journey – acquisition (converting a prospect to a paying client), ascension (getting a current client to come more often or to spend more each time they come), and retention (bring a lost or out of pattern client back to your business). I think you are leaving money on the table, since you are leaving appreciation out of the strategy. Isn’t it okay to buy your wife flowers “just because” once in a while? But you could start with just those three points of the client journey and you will see what it does to ring your cash drawer. Then you will add the fourth!

Human psychology is very powerful. Almost all of us, regardless of our socio-economic status, want to feel like we got a good deal. The reason is we want to feel appreciated and feel important. Go ahead and use this to your advantage and dip your toe into the water by creating irresistible offers. You might just switch the term you use from “discounting your services” to “investing in your clients.” They are, after all, the lifeblood of your business.

Have a great week!
Dave