Article by Sandra Garlick 18.07.16
So often I see companies offering “Free Stuff”, “Special Offer”, “Cheapest” when advertising products and services.
Having a special offer or promotion is great, but when you start a business you need to create value. If you offer free promotions from the outset, then later try to charge for those products or services, the value may already have been lost.
Promotions and free offers have their place…usually when you are established. Obviously, it depends on your sector. For example… I have seen many events publish their ticket prices, only to find that during the last few weeks of sales they are reduced or sometimes offered on a buy one get one free (BOGOF). This suggests to me that they haven’t sold enough tickets! The original purchasers get annoyed that they have paid the full price and instantly the value of the event has diminished. This happened to me when I paid full price for a well-known speaker in London. It was advertised that this was his last event in the UK and I happily paid full price to see him. I soon realised this wasn’t the case when, after the event, I was bombarded by sales calls from his team offering me half price, BOGOFs and freebies to attend his next event in the UK. I was quite angry and have never attended since, on principle.
When I started in business, my fees were relatively low for my sector. I soon increased these to demonstrate my value and expertise. I noticed that when I offered a reduced rate, my customers expected a Rolls Royce service for a bargain rate. In fact, I started to say “no” and to choose my customers carefully. If they valued my expertise then they should be prepared to pay for it and it worked.
So think carefully about your value. Are you creating value for the services you deliver or the products you sell?
- Think carefully about how your offers and promotions will be perceived by your customers;
- If you are offering something for Free, think about why a customer should come back and purchase from you;
- If you are going to reduce your prices after you have sold at full price, think about why you are doing this and the impact on future sales.
Sandra Garlick is a Business Consultant, Adviser and Mentor. She works with business owners on growth strategy, from start up through to exit. Sandra is also a public speaker and trainer.
Follow Sandra on Twitter @SandraGarlick