There’s a common trap that a lot of business owners fall into that ends up costing them a lot of money. You actually see this quite a bit in the e-commerce space.
The trap looks like this.
In an effort to boost sales, online stores will run limited time Flash Sales or discounts on their products. This often brings in an influx of cash which is great. It also converts prospects to customers and that’s even better. So they do it again. And again. And again.
But there’s a big down side…
Before they know it they have trained their customers to only buy based on price. They’ve trained their customers to always look for the discount.
And when you train your customers this way you now find yourself competing with Amazon, Walmart, and all the big retail stores. And you’re in danger of losing your competitive edge.
Because if you are only going to compete on price, you will lose.
You do not want to position yourself as a commodity. And when you win or lose based on price…that’s exactly what you’re doing.
The good news is that you have something that the big retail stores do not. You have the ability to inject personality and premiums into your offers so that your products deliver much more value even if they may be higher-priced.
My mentor teaches that customers refund transactions but they don’t refund relationships.
So your first step in avoiding commoditization is to give a name and face to your business that your customers can know, like and trust.
You want your emails to come from a person. You want your company to feel like a person.
Some of you will resist this. And that’s totally your choice. But based on my experience selling online for the past decade, attaching a personality to your brand is the best opportunity to differentiate yourself from your competitors.
But it’s not enough…
The other strategy you want to use is to sell premiums as bonuses as an alternative to discounting your core product. You would use this during a regular promotion instead of offering the discount.
I call this the Reverse Flash Sale. Here’s how it works.
Let’s say for one weekend you’re going to run a storewide promotion. Anything in the store is part of this promotion. But instead of giving people a code for 20% off or 50% off, every purchase will come with your collection of premium bonuses.
You want the bonuses themselves to have a higher perceived value than the actual product. When people see the bonuses that you’re offering you want them to think “how in the world are they giving these away for free?”
The economics are roughly the same from when you were offering the discounted items. And sometimes the economics are even better because you’re not discounting your core products. You can even use this strategy to get rid of some old inventory.
But more importantly your customers are getting a tremendous amount of value from you, and they’re paying full price for the items in your store. AND they’re still excited because they’re getting this bonus bundle for free.
So here’s the question…
What do you currently have access to that you could bundle with your products? Do you offer any services?
For example, if you sell software to businesses you can offer:
- done for you set-up
- weekly group coaching on getting the most out of your software
- other premium software that you may use for lead generation
If you sell to busy moms consider bundling:
- wine. Lots of wine Seriously – could you find a partner to provide a free bottle or coupon?
- a high end relaxation kit
- 1 hr free home cleaning from a national maid service. The maid service would probably do this for free for the lead.
One great place to check for ideas and even potential partners for this strategy is Crate Joy. You can take a look at bundles in just about every niche.
If you’re playing the long game, you need these two components:
When you give people the opportunity to build a relationship with your business without training them to compare you to the big box retailers, you’re thinking long term.