Discount and promotional strategy

Lesson Details:

Video Transcription: In this video let's talk about how to use discounts and promotions for your products to boost sales and to use them to set the price for your product or service this video is brought to you by Appy Pie’s Academy so just about every business has them Apple is very famous for almost never having them having very few of them but most businesses use them very liberally and they make it look like they don't and first of all it's important for them for the businesses to create a perception of value so for example you know a lot of products they take literally paintings to make but it doesn't matter because the more you can get for the product the more profit the company makes so the company has to make their products or services appear as though they are more valuable than they are and often pricing things high is part of making products appear more valuable and as long as the market holds up that price in other words as long as there is no competitor of yours that's under bidding you in price and the price the market price for a certain service or product is stable then that's the perceived value okay for the product even though the value might be ten times less and the higher you create the value of perception the more you can run discounts and discounts are really closer to the real price as long as low as you can go but because the perceived price is for example ten dollars maybe like $9.99 the discounted price may be $6.99 or $4.99 and to the buyer that seems like an amazing opportunity to buy it but the seller knows hey this is I'm still making a profit.

I just ballooned and inflated the original price so I'm able to give you a big discount the price you're paying the $6.99 or the $4.99 worse the $4.99 is probably close you you know if there was price competition that business could still probably come down to $4.99 you know in our example at least and you the businesses they get a huge boost from discount when they run discount because they're able to promote discounts in many places on their site people jump on their you know on their site or in the store people really jump on the discounts because they see oh my god it used to be $9.99 now it's $4.99 like 50% discount I gotta get it now because all the other times I'll have to pay put the full price so people jump on it first of all and not only that but it gives the business and opportunity to sell it promote it externally like on discount websites on newspapers and different ads I deal everybody who wants a deal and pricing higher then you would allows you to create deals and because you can create deals you have more channels to promote your products specifically promoting deals and people love deals they jump on deals this is the whole point of these discounts now how do you make people jump on deals way more readily there is a concept of scarcity now if you have a deal every day of the year there is no deal so you have to limit the deal artificially sometimes the deal is limited naturally but most of the time the discount or the deal is limited artificially so you can say oh until supplies ran out but you know your supply will never run out you can always order more or people say this month only or this weekend only or you know this spring break only or this summer only whatever people give a deadline for the end of the promotion it's very important so that the customers know oh my god I got a jump on this offer I gotta get it before the time runs out but very often even if the time runs out not always but often you can still get that same deal if you ask for it even if the time right now and you can make create scarcity by saying only a hundred people like only the first hundred people get this deal or anything anyway you can limit the availability makes people kind of nervous because the oh my god I'm not gonna get the deal and so they act on it more quickly if they feel like this deal is gonna be around for a while they get complacent and they don't act on it and the deal loses effectiveness so just to recap you wanna price a little bit higher than typical so you can run promotions and deals and when you run the promotions in deals you want to create scarcity so that people jump on it so you'll be making a lot more sales if you price a little higher and sell it at the deal and run really strong promotions during the deal periods