When we talk about creating an irresistable offer, many of our clients jump to the conclusion that we’re asking them to drop their price.
Nothing could be further from the truth.
Discounting your price is something we rarely advise clients to do.
It erodes your credibility, it takes the power out of your position, and it can kill your company.
Transcript:
Announcer : You are listening to aviation marketing Hangar Flying, the community for the best sales and marketing professionals in the aviation industry. You can’t learn to fly just from a book. You learn from other pilots who know the tools, the skills, and the territory. Your hosts John and Paula Williams are your sales and marketing test pilots. They take the risks for you, and share strategies, relevant examples, hacks and how to’s. Be sure to subscribe on iTunes so you won’t miss a thing.
Paula Williams: Welcome to aviation marketing Hangar Flying episode number four. I’m Paula Williams.
John Williams : I’m John Williams.
Paula Williams: We are ABCI, and ABCI’s mission is?
John Williams : To help all you ladies and gents out there sale more products and services hopefully quicker.
Paula Williams: Exactly. In episode two, we talked about campaigns and why we need to be running campaigns. In episode three, we talked about one of the three elements of campaigns. Right?
John Williams : That would be the list.
Paula Williams: Exactly. The three elements of campaigns are?
John Williams : Number two is the offer, and then followed by the presentation.
Paula Williams: Right, so the list, the offer, and the presentation. We’ve already talked about the list, so today we are talking about the offer. Let’s start with rule number one of offers.
John Williams : Never lower your price.
Paula Williams: Right. Never discount your price. We are also going to talk today about when to break that rule, but when we talk about special offers and things like that, everybody seems to automatically jump to the position. They seem spring-loaded to the opinion that they need to discount their price to make a good offer or a compelling offer. That is absolutely not true.
John Williams : Exactly. Recall from just living that all the car dealers, all the grocery stores, all the suppliers, all the aircraft manufacturers always, always raise prices annually, at least.
Paula Williams: Exactly. In the aviation industry, you can really do yourself a lot more harm than good by discounting your price too much. First of all, it erodes your credibility in your price.
John Williams : Don’t even think about discounting the price. You are in a race to the bottom if you do that. What you want to do is figure out the value added or the price that they pay.
Paula Williams: Exactly. People who bought from you last … Let’s say you do a 50% off sale, the people who bought from you last week are going to be really upset that they bought from you last week, and it looks you are rewarding bad behavior by making people wait for sales. We really, really don’t want to do that in the aviation industry.
John Williams : There is one time when you might consider it and there are others, but volume discounts, if you instead of one Gulfstream IV, you buy three, I’m sure Gulfstream is going to talk to you seriously.
Paula Williams: Exactly. There’s lots of things to do besides discounting your price. Another reason that you don’t want to discount your price is because you really want to maintain the overhead to have absolutely fantastic service. You don’t want to be in the position of being the low-cost option in your market. In fact, when people talk with us about marketing services and things like that and ask us to submit a bid, we tell them we are not even going to bother. If you are looking for the lowest cost provider of that service, that’s not the position we want to be in.
John Williams : Obviously, if the government were into marketing would put us out, but that’s okay.
Paula Williams: Exactly. A couple of alternatives to reducing your price are to increase value or to decrease risk. We are going to be talking about some options, we are doing that today.
John Williams : We’ll probably also talk about the rare instances when you might want to consider a discount price.
Paula Williams: Exactly. First of all, increasing the value of your product. There’s a bunch of options that you have here. The first thing you might want to consider is packaging or bundling your product with other items; with accessories, or training, or something like that that will improve your product’s performance, or its value to the person who is buying it. Let’s say that you have a software, a program, or a product that’s fairly complex. In a lot of cases it would be worth more to the person who is buying it if you also send someone to do training, and train their staff on how to use it. That would be a lot more value than simply the product itself.
John Williams : Or a money back guarantee.
Paula Williams: That’s actually under reducing risk. We’ll talk about that later, but anyway, packaging or bundling. Other things that you can add to the product would be a non-competing organization that might provide something similar. Let’s say people bring in their airplane for service, and you work with another provider at your airport who does detailing. You can have them come in, and you can schedule those services simultaneously, have some people working on the interior of the aircraft while you are doing work on the exterior.
Lots of ways to make this work. You can do packaging or bundling, or you can add convenience. Both of those increase the value of your product. It’s fairly simple to add a training or information product to whatever product or service that you have; “100 ways to use this product, or 100 tips for getting the best value out of it,” really improves the perceived value and also the actual value, realized value of the buyer. We get a box from a … There’s a
To me, I open these things and I look at some of these produce, and I go, “What the heck am I going to do with this? This doesn’t have any value to me,” until it comes with some information that helps me decide, this is how I could use this in an interesting way for a dinner or a party when we are having guests over or something like that.
John Williams : You are always good at that.
Paula Williams: Thank you. It’s not just that sort of thing, it’s also business-to-business. You look at situations where a lot of companies don’t use the products or services that they have lying around because their staff just doesn’t know how to use it properly, or they are not getting the maximum value because they are not using it right. Here’s another idea. You can add something that’s completely unrelated to your product or service. Like add a box of peaches if you are from Georgia. Any number of things that would work for a business-to-business situation, because a business-t- -business buyer can be influenced if you throw something in that is a personal value to them. If vendor A just gives them the product, and vendor B gives them the product plus some extra pack that they get to keep themselves, that may influence their decision.
John Williams : I know a charter operator as an example that when you drive up to have your car parked, by the time you return that car has been detailed and ready for you to go.
Paula Williams: Exactly. You are paying for the charter flight, but your are also getting your car detailed. I think they also take care of your dry cleaning and all kinds of crazy things that are completely unrelated. That’s completely unrelated and it also adds convenience.
John Williams : [inaudible 00:08:42]
Paula Williams: Right. Let’s talk about reducing risk. The biggest thing that comes to mind when you talk about reducing risk is a guarantee of some kind, and this tends to make people really nervous.
John Williams : It shouldn’t. In our society, it has been pretty much de facto now that if you don’t like something and you haven’t destroyed it, you are going to take it back.
Paula Williams: Exactly. It has actually gotten to the point, such a biased market that almost everything in the consumer world, you kind of expect it to be able to return. It’s like people keep their receipts, and everything else. The culture has gotten so used to being able to return things, that it’s almost a practice of doing business. That if you are not satisfied, you can return it.
John Williams : It’s even getting worse or better depending on your perspective, and that you don’t even need receipts in a lot of places any longer.
Paula Williams: Exactly. There is a lot of companies that pride themselves on taking back … I think [Erehwon 00:09:44] has a page on their website where they talk about people whose equipment has been destroyed by a [puller bear 00:09:50] or whatever. It just makes a very great story and great marketing that they would return or replace that product. There are actually very few people, especially in the aviation industry, and especially in business-to-business that will abuse the privilege. The numbers are not going to be statistically significant.
John Williams : It’s interesting that … In fact, it’s pretty much unheard of that anybody in aviation will actually take anything back, and if they do, it’s [reality 00:10:20].
Paula Williams: Exactly. You do want to write a great guarantee because it will improve your sales, generally speaking, a lot more than it would detract from your bottom line. You want to make sure that when you write that guarantee, you want to make sure that you write it so that you are only guaranteeing things that you can control. A lot of our products and services interact with a lot of other things and depend on people using them correctly and so on. You don’t want to be a weasel about this, but you do want to make sure that you are explicit about what you are expecting of the customer in order to fairly exercise the guarantee.
John Williams : Exactly. It’s actually pretty straight forward to write one of those.
Paula Williams: Exactly. You want to do a really good guarantee, and you can do this really creatively. This can become one of your best selling points and one of your best things that people talk about about your company if you do a really fantastic guarantee. Last thing is if you do want to break rule number one and reduce your price, there are some ways to do it without incurring the harm that we talked about at the beginning of the program, like eroding your credibility or upsetting your previous customers, and other kinds of things. The main thing is to have a reason for your discount that is a legitimate business reason that logical people can understand, like next year’s model is coming out, so we need to get rid of this year’s model.
John Williams : Exactly. In fact, personal experience I put the larger purchases that I always plan to do at the end of the year. I have purchased vehicles where I have got about a 30% markdown on a vehicle. I’ve purchased furniture in quantities that I got a 50% markdown, and I’ve purchased aircraft where I got a very nice reduction in price as well.
Paula Williams: Because of the model, or year, or because something else? John Williams : End of the year.
Paula Williams: End of the year. Cool. All right, and then also, of course, there’s the scratch and dent option. When we are talking pre-owned aircraft or anything else, obviously those things don’t leave the market when they have a scratch on them. A lot of times, that will influence the price, and other products as well. If you can give a legitimate reason that is not going to impact the usability of the product, but you have some reason to give people a discount, you can certainly do that and keep your credibility. Another option is when you have your new product or a new service and you want to beta test it. You can have an introductory offer and put all kinds of conditions on that; “We’d love to have you try this, and in return for a really low price, we’d love to have you fill out a really detailed survey at the end of this.” They call it beta test in the software world, but you can use it as well in any industry. They don’t have all the goodies in [there 00:13:27]. Still they kind [of value it 00:13:28], right?
John Williams : Exactly. It all works here as well.
Paula Williams: True. That’s pretty much it for a great offer. Those are the three things that you can do when you think about creating a fantastic offer. You want to put together something that is time- bound, you want to increase the value, and you want to reduce the risk. You may very carefully want to consider reducing the price, but that’s always the last resort. Right?
John Williams : Absolutely. Last resort.
Paula Williams: Okay. In [inaudible 00:14:02] episode, we have a tip sheet that you can download by going to www.amhangarclient.com/4 for episode four, and the tip sheet this time is going to be a list of ways that you can improve your offer. Go ahead and get that downloaded, then you’ll have something in writing that you can use to check out some of these ways of brainstorming offer improvement. You may want to look at our social media guide that just came out on Amazon, quick housekeeping item, and also on the 11th of November, we’ve got our designing campaigns webinar. Feel free to join us for that. We are going to be talking in more depth about a lot of the things that we are talking about here, and also you’ll be able to see us as well as hear us.
John Williams : Have a great week and we’ll talk to you next time.
Announcer : Thanks for joining us for aviation marketing Hangar Flying, the best place to learn what really works in sales and marketing in the aviation industry. Remember to subscribe on iTunes and leave a review!
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