I cannot believe we are already talking about Black Friday or end of year promotions and sales! This year is flying by. I am back with a solo podcast with a topic that I’ve wanted to do for a while, and this is on DISCOUNTS. I’ve gotten a few requests for episodes that fit under this umbrella so here we go!
I’ll just give a little bit of a background on pricing, because we can’t talk about discounts without talking about what you’re discounting. If your prices are all over the place, ie. you have a few people buying $50 sessions, a few buying $90 sessions, and a few buying $150 sessions, with no rhyme or reason or difference in the product, you need to improve your pricing consistency first before you engage in a flash sale. Once you’re on a more level playing field then you can start to look at your discounts and promotions.
We went deep into this in our pricing strategy inside the Friday Society Membership, and I will recap for you here.
If you’re a studio saying that you charge $45 for a drop in, but you have an unlimited for $199 and your client frequency for that package is 20X a month, you’re actually saying that your product is worth $9.95 per class. That’s a $35 discrepancy, which makes you seem like you’re trying to pull one over on the people who are booking it without knowing the tricks. I know that recurring revenue can feel like the thing that you need the most, and I get that, but you have to have consistency within your pricing, first and foremost, and then create your packages around that.
When it comes to pricing, and like everything else, consistency is key to a great brand reputation. If one person is coming to class for $10, and 50% are coming for $45, at some point, the discrepancy is going to surface and you’re going to have a bunch of people who feel like you took advantage of them.
Here inside my little corner of the world, authenticity and integrity as a business owner is paramount. This is always going to be the most important thing.
Now, when it comes to running blanket discounts (meaning everyone gets the same percentage off and it’s public), there are a few businesses I know of, and I’m sure you can think of a few too, that are consistently running a “limited, sold out” package, but somehow it’s always available. This just feels out of integrity, and it feels confusing. Also, it makes your business appear that it’s not doing too well. It is incredibly easy to get your clients used to a discount.
Let’s take a look at J. Crew for example, there are tons of retailers that got their client way too used to discounts, that charging full price feels like it’s just not really possible for them anymore. I personally don’t ever buy anything at J. Crew until I see 40% off, because they run discounts so often. It’s a slippery slope to rely on discounts for a bump in your sales and I really, really want you to be cognizant of that. Again, you can’t tell someone your jacket is worth $200 if you’re constantly actually selling it for $120. You can’t tell someone your class is worth $45 if you’re constantly booking classes out at $9.95 per head.
My personal general rule of thumb that I advise clients on is never run a sale or promotion more than 4X a year. That is absolute maximum. This would look like: a summer sale for those June/July dips, a January sale to support people trying to build new habits, maybe an anniversary sale, and then Black Friday or Small Business Saturday, if you want to partake.
To make sure your promotion goes super well, here are a few marketing strategy implementations –
- Support your product and your promotions by talking about your product ALL THE TIME, not just during your promotion.
- I personally only run a promotion for The Friday Society Membership once a year, if that. 1:1 sessions never – because this is my time and my utilization is at max capacity, so I’m not at a place right now where I need to. That might change, but I haven’t had to yet. I do need to raise prices soon, but that’s a different podcast episode. Courses, I never run promotions, but I do give discounts to my members. This is a private discount, and is a reward for being part of my community. I give this discount to supplement the work that we do inside the membership, and again, as a thank you.
- Use a discount code instead of creating a million different packages
- If you are to run a discount, I’m a fan of using discount codes as opposed to creating entirely new packages because 1) people know the discount they’re getting which is good, 2) it’s so much easier for you to manage, and 3) all of your reports are clean. You’re not going to be pulling reports in January and think, oh I have to also factor in the January membership sale package, and the student package, and the military discount… if you do that. It’s likely something will slip through the cracks.
- When I did run a promotion in June, it honestly doubled my membership count, and I believe that’s due to a few things but the biggest one is that I am constantly speaking about the membership. This allowed my client to understand exactly what they were getting into before they purchased. Likely, a lot of people were thinking about it before
- Know your data and your goals
- I have noticed that my retention from people who joined on a promo is much lower than those who join at full price. Therefore, I probably won’t do another promotion, and if I do, it’ll look different. I’d also really consider the retention rates of people that have joined your business through a promo, and if that matters to you or you have a recurring revenue business model, I would maybe think twice. I’m not saying don’t do it but take a look at your data before jumping in to a blanket percentage off.
Alright, so now let’s get into Black Friday, Cyber Monday, and all that’s coming up. Black Friday is known to most of us in America as the day after Thanksgiving sale, when a ton of stores offer discounts and shopping is crazy. Prior to online shopping, you’d gear up with your family and get great discounts on the things you were hoping to buy others, or yourselves, for the holidays.
The term Black Friday actually comes (I’ll link the article below) from Philadelphia in the 1950’s, I’ll copy straight from the article here – “Back in the 1950s, police in the city of Philadelphia used the term to describe the chaos that ensued on the day after Thanksgiving, when hordes of suburban shoppers and tourists flooded into the city in advance of the big Army-Navy football game held on that Saturday every year. Not only were Philly cops not able to take the day off, but they had to work extra-long shifts dealing with the additional crowds and traffic. Shoplifters also took advantage of the bedlam in stores and made off with merchandise, adding to the law enforcement headache.
By 1961, “Black Friday” had caught on in Philadelphia, to the extent that the city’s merchants and boosters tried unsuccessfully to change it to “Big Friday” in order to remove the negative connotations. The term didn’t spread to the rest of the country until much later, however, and as recently as 1985 it wasn’t in common use nationwide. Sometime in the late 1980s, however, retailers found a way to reinvent Black Friday and turn it into something that reflected positively, rather than negatively, on them and their customers. The result was the “red to black” concept of the holiday mentioned earlier, and the notion that the day after Thanksgiving marked the occasion when America’s stores finally turned a profit.”
What has happened since then is that we now have Black Friday, Small Business Saturday, Cyber Monday, and Giving Tuesday. I’m not going to tell you whether or not to participate, because that’s entirely up to you, BUT if you do, do it well. Let people know something is coming, spend the weeks (aka start now) leading up to your promotion talking about your product and what it’s like to work with you, and getting your marketing in order.
I personally will most likely not be doing any sort or promotion, because again, my data is showing that my 1:1 are at capacity and my membership members stick around when they pay full price (again, this is $500-$600 a year depending what plan you choose – $50 a month – a literal drop in the bucket for all you learn and a write off) but I WILL be doing Giving Tuesday. I already donate 1% of sales every month to New York Cares – it’s a food pantry where I volunteer, but I will probably do a 50% of proceeds day or something like that.
To recap, stay consistent with your pricing, level your ground, then consider the promotions. Know your data and your goals from each promotion without just running it blindly and often, and stay CONSISTENT WITH YOUR MARKETING!
Ok guys that’s it for this topic!! Check out the full episode below and I hope this content was helpful and that you all have a truly lovely holiday season.
Love you all, see you in the membership!