The difference with retailers discounting is they don't chase you out the door and yell "excuse me sir, I noticed you looking at that digitial camcorder - I'll give you a 50% discount if you'll come back inside and buy right now!"

Their discounts are announced when you come in the front door, not as you exit the back.

Come clean, Brother Moffat!

I remember a couple years ago discussing this with you, and you did bring somewhat around to your way of thinking.

As of now, I'd say this - If you are absolutely convinced your product is a blessing to your customers, then push as hard as you want. If it's not, you'll find out soon enough.

But let me ask you this. Who were you "bottom trawling"; was it your list? The way I look at it is, if you're pi**ing in your own pond, you're gonna figure out pretty quick if what you're doing is actually spoiling things. Soon you won't have much of a list. And any potential JV partners you approach are sure not going to let you rape their lists.

The things I'm referring to as bottom trawling are generally done on mass mailings by people who have no desire whatsoever to build a relationship with their list, they just exploit the largest herd possible, then move on. Think of the worst CPA abuses, and that's what I'm getting at.

Or sending out "rebate checks" that are actually agreements to subscribe to telecom services, but are carefully parsed to induce all but the most careful readers to think they're getting a no-strings-attached rebate from someone they've already done business with

I know of a marketer who had to cough up $17 million to the FTC for that very thing. He finally figured out doing business that way isn't just bad for the bank account, it's bad for the soul. Now he makes a good living as a consultant, teaching people to treat their databases as a resource to be nurtured, not as an expendable asset.

poor example...

its comparing apples and oranges.

retailers don't also mark up a product the way info marketers do.

Ever hear the Dan Kennedy story about the woman who was supposed to
discount the jewelry in the store that wasn't selling well, but accidentally raised the price instead?

They sold out the entire collection for way more then they had previously offered it. It wasn't selling at all, until they jacked up the price.

Maybe more retailers should try the "mark up".

I agree it's not the fairest example, but stores discount stuff ALL THE TIME. So why is it so bad when marketers do it?

In many ways retailers are using many of the same tricks we are using
such as scarcity sales, product launches, joint ventures, etc.

Personally I don't see too much difference. In the end, it's all just selling stuff.

First off... I'm not sure what side of this argument I come out on but...

Retailers DO jack up prices before discounting them. It happens all the time. Not only that, often times the "retail price" is a bogus one that they never sell at. It's there just so they can show how much of a discount they're giving.

A perfect example is Macy's. You buy a tie at (let's say) 50 bucks. The following week you go and they say, "All Ties 60% off!" You think you can get the same 50 dollar tie for 20 bucks. You get to the register and find out they're giving you 60% off some bogus $110.00 price they've never sold a single tie for.

I just moved into a new home. I was buying furniture last month and went to some big tent sale (I'm in NC where furniture is a big industry). The sale advertised "80% off our normal low prices."

I was there the week before and thought their normal prices were pretty good. So... we went to the tent sale. Every single item (including exact couches I sat on the week before) now had much higher prices on them... just so they could knock 80% off.

This is just a practice of retailers and has been forever.

It seems like this whole 'discounting' issue is a lot like other things in marketing; it depends on your product and your business and what you want to achieve in the long term.

If you offer a discount on a product that is quality then you are offering a true 'value' to your customer whom will remember the favor and read your email blast and purchase from you again.

If you constantly offer steep discounts, through exit page discounting then your customer will come to expect these discounts. That is a road you pave and have to maintain.

What annoys me is the borderline 'junk' that is sold under the guise of discounting when in fact it's just junk, not even worth the discounted price.

Inherently exit page discounts as with all discounts are meant to stimulate sales or offer special bonuses to induce your customer to respond positively to your offer in the hopes you may profit from your back end sales to that customer.

A one time offer from a marketer whom I don't know on a exit page blast will piss me off and I would buy nothing from them because I do not like those tactics.

And if I am forced me to stay longer than I like at a site I write their name down and make it a point to never buy from them. There are people like me out there. They spend money but - on their own terms - not the marketers.

Some may not wish to sell to me. Fine. I spend my $5000 - $10,000 with someone else. (average amount I might spend on internet purchases per year)

All I'm trying to say is this: there's is a time and place in which every technique can be used wisely.

Why is discounting the lowest form of marketing?

Is "Nordstrom" the lowest form of marketers because they do
1/2 off sales on their clothes?

Is "Target" the lowest form of marketers because they have
blowout sales on slippers?

Is "McDonalds" the lowest form of marketers because they run
deals on the Big Mac?

I'm a bit confused here?

Why is discounting such a low form of marketing (especially when
it has been proven many times over to increase revenues)?




Discounting is the lowest form of marketing because it makes the lowest nett
profit and creating nett profit is the most important function of marketing.

Notice your long list were all large companies with exceptionally low
profit to turnover ratios.

Put another way they get a very low return on investment when you consider the amount of money tied up in stock etc.

If you're running a small to medium business you generally want your profit to turnover
ratio to be as high as possible (that way you get a very high return for the money you invest).

Incidentally I didn't say discounting wasn't effective at making sales or a
strategy you should always avoid.

I said it was the lowest form of marketing.

If discounting is your only marketing strategy it's just a matter of time before
you have a competitor with deeper pockets than you who is more effective
at back end strategies who drives you out of the marketplace by undercutting
you.

You're setting up a situation where all your clients are looking for discounts
instead of investing your time and effort in building value for your clients....not good.


I love your story of the jeweller who's staff raised her prices accidentally and
sold out the stock in the store.

That's a great example of increasing perceived value by charging more.



Also in a brick and mortar business the model of the discount business is not
a very good one.

You run on very tight margins, low nett profits, you have huge capital tied up
in stock (because you need a lot more of it), huge overheads in staff and other
expenses (you need more space and staff) and you attract competitors who
have no trouble competing with your only strategy (discounting) any time they
want to.

Put simply if they want to beat you in the marketplace they just drop their
price below yours.


Compare that to building a solid, loyal, client base with a foundation of
either unique products or services or products and services delivered in
a unique way to add value.

High nett profits, loyal long term clients and business build on truly
niching effectively and providing value instead of just dropping prices
expecting that to bring in business.



But the biggest problem when you're talking about discounts on exit
pages is the complete lack of thought and marketing expertise that goes into it.

Imagine I'm selling you a boat.

You're looking at the boat and you see a small crack in the stern.

So you think to yourself "I'm not sure about spending my money on
this boat. That crack might leak, the whole boat could even come
apart and I could sink to the bottom of the ocean."

So you leave.

But as you're leaving the owner yells out "I'll give you 10% off!"

That doesn't answer your objection about the crack in the boat or
the potential leaking and sinking issue.

In fact you may even be MORE convinced the boat is a leaky death
trap now the owner seems so desperate to drop the price to make a
sale.

(He's just dropped the perceived value of the boat by dropping the
price in a last ditch measure.)



But let's imagine instead the owner called out:
"Oh I forgot to tell you about the crack in the back of the boat.

"We had it pressure tested to 1,000 feet to make sure it wouldn't leak
and on top of that we put 4 layers of fiberglass over it to reinforce it.

"That crack will still be holding together long after the boat's a rotted
out hulk."


See the difference in finding and answering key objections.

(The owner might be even more effective by simply asking "Is there
any problem you had with the boat we might be able to talk about?")


Most people don't leave sales pages because the price is too high.

They're leaving because they don't trust you, they don't believe
the product is useful to them or they don't believe it will do what
you claim it will do.

So you might want to test exit pages that build trust, make a last
ditch effort at pointing out how the product is useful to your prospect
or proving your product lives up to its claims.

I'd also suggest that early on when you're using an exit page it
might be wise to use a survey to ASK why your prospects are leaving.

Most marketing mistakes are based around arrogantly thinking you know your
market instead of seeking out that information by asking for it from the
only people who can tell you.

Kindest regards,
Andrew Cavanagh

I think you nailed it once again.

"If you are absolutely convinced your product is a blessing to your customers, then push as hard as you want."

I think a better way of saying this might be "If you're absolutely convinced your product is
a blessing to your customers and is exceptional value for money then do everything within your power and skill to get them to buy."

Pushing hard won't necessarily help you make sales.

Again it comes back to working out why your prospects aren't buying and dealing
with those specific problems and objections.

Kindest regards,
Andrew Cavanagh

That's a good distinction Andrew, and one I'll keep in mind. Thanks.