SPI 768: Ditch the D Word—”Discounts”

SPI 768: Ditch the D Word—”Discounts”

Announcer: You’re listening to the Smart Passive Income Podcast, a proud member of the Entrepreneur Podcast Network, a show that’s all about working hard now, so you can sit back and reap the benefits later. And now your host. One day, he wants to throw a dart at a map and just go there. In the meantime, he’s practicing darts. Pat Flynn.

Pat Flynn: Hey, we need to talk about pricing strategies. You know, pricing is something that is a very, very big topic. Obviously when you sell something, you put a price to it and that price says something about the value that will come in exchange for a person’s money and a person’s time. And we’ve had people on the show before, really smart people like Ramit Sethi, talk about pricing and pricing psychology, right?

And then those conversations are still worth going back to so you can look up Ramit Sethi on the podcast and probably find a number of different episodes where we talk about the psychology of pricing But one particular component that we need to talk about is this little word called discount and something that we’ve done at SPI to pretty much remove it from our lexicon, our vocabulary, when it comes to promoting products on our end. You know, since 2017, when I started selling products for the first time, because before that it was affiliate marketing and I was essentially just recommending other products and generating some really good revenue doing that.

In 2017, I finally started selling my own online courses, and between 2017 and 2021, the promotions were always as follows, get the course at a discounted price now before the cart closes, or before the discount window ends. And the D word, this discount word, continued to just like permeate through the ether of SPI.

So much so that eventually when we ended up selling things that we didn’t want to include a discount or didn’t have a discount, people ask, hey, is there a discount on this? And what we realized over time is that we had trained our audience, not that we create really good products and that they get results, but that we always do a discount.

And this is why the only way to really move the needle, especially 2021, 2022 with our solo online courses. Was by making sure the discount was known the center of the promotion and sometimes bigger than normal just because people would only move during those times. Yes, the courses were always for sale, but rarely would a person go through and purchase it at the full price because many people and they’ve told us, well, we’ll just wait till it goes on discount again. We’ll wait till you do another promotion and we’ll be able to save 100 or 200. And that’s not a great spot when really your audience is now controlling your revenue. You are not controlling your revenue.

So we’ve done what we can to remove the discount word. And there’s a few ways to do this. Initially, I was very worried about this because a, it was pretty easy to sell when you have a discounted price, especially because there’s that scarcity. Get it now before the price goes back up. And that scarcity, that urgency, psychologically, a person is now forced to make a decision because if they don’t, they’re going to either have to pay more or have to wait.

So this idea of urgency is really what I was worried about. Like, how are we going to add urgency into this model now? So with the solo courses, the one off courses, what we ended up doing was seeing if we could replace the urgency of getting a price discount in time for rather bonuses. The price would be the same as, as always was.

But what you would be losing if you didn’t make a decision now in buying during this window or this period after, for example, a webinar you know, a week after a webinar or 10 days after a webinar, we have these sequences and we talk about this in our All Access Pass. If you have email marketing magic, for example, you have the seven day sequence and the other sequences that you could download and kind of mad lives on for your own stuff.

But in general, we tried the bonus thing and it kind of worked. But then we realized that, well, we were just kind of stuffing bonuses in there. There were good bonuses, but was it really of value. I mean, maybe quote unquote paper value, right? There was bonuses that we included that were other things that were once for sale, like workshops that were 99 or books or workbooks or little workshops that we did that we had an actual real price value to them.

That’s where a lot of people get it wrong when they try the strategies that they just make up things or they throw freebies in, but then tack a price on. No, these things were actually things that you could buy at a certain price that we decided to offer for free. So we never had to use the discount. It was 169 in value that you’d be able to get as a bonus if you act now.

And if you don’t, you’d be losing that. It worked a little bit, but what we realized, especially through conversations, you are new here. You’ll know that I always talk about, have conversations with your people, have conversations with your audience, have conversations with your subscribers, not just your people on X, not just your commenters on Instagram, literally your customers, literally your subscribers. Get on a DM or a zoom call with them. You’re going to learn so much. One thing we learned, or I learned was that people didn’t want those bonuses, even though they were good, it was just more stuff. It was actually stuff that kind of distracted them. It was stuff that took them away from the course that they initially were pitched.

Right? Here’s a podcasting course. Cool. And here’s another bonus. That’s not about podcasting, but you probably can use it one day or now, but then if you take it now, then it’s taking you away from the thing that we really want you to do so. We were kind of feeling like we were in this trap, but the other kind of scarcity that you can include is time time scarcity, and that’s where we’ve really leaned into things and things have really, really worked.

Now, if you have a program or some sort of offer that opens and then closes. That’s a very compelling reason to make a decision. Get it now because it won’t be available in the future. That can only work so well for a digital course. Because in general, most people know that the course will open again in the future, and unless the drive is so high right now, unless the pain is so painful that a person needs the solution at this very moment, well then they’ll just wait till the next moment.

I don’t need it right now, I’ll get it later. Many people did not. Some people did. But many people did not. So the time urgency, Oh, this course is only available until this time. Well, it’s, it’s an online course. So why are you even closing it? Right? So we would say things like, Okay, well, we want to make sure the students that are taking the course have full accessibility to me at office hours and and have the best chance and that worked a little bit, right? Okay, now you have kind of a reason to close a digital course, which literally you just have to turn on and off like a faucet in order for people to get access to it or not. So I mean, it was half believable at that point.

But what really made it work and what really makes it work today is this idea of having it be time based, centered around a moment in time, a number of weeks, starting on a particular date that you can go through the course with other people and an instructor from SPI. So through a cohort, in real time, together. Still the same course. You’re still asynchronously learning. Person A might zip through three modules in one day. And person B maybe just the first lesson because that’s all they had time for. But the cool thing about, and this is what we call inside of our All Access Pass, the accelerator model, it really says, I mean, the different courses that we have accelerators for are different lengths of time.

Some of them require more time, like our, I think our Community Business Blueprint course, which helps you build an online community, is more weeks than the podcasting course, which is more weeks than the Affiliate Marketing course, but they all go through X number of weeks, anywhere between six and 10 or 12 and you go through it with other people.

So you have to make a decision to purchase this by this time because everybody starts the first module together learning at whatever point during the week you can learn it. on this week, on this date. And then on Thursday on that week, we come together in office hours and talk about it. Right? And that’s the benefit of going through it together with other people.

You’re more likely to succeed. The data shows it. We’ve seen our data show it, and it’s been amazing. And so, as a person pitching on these webinars, or on the podcast, or on YouTube videos, or wherever, It is very clear why we’re saying you got to act now, right? You have to make a decision because if you don’t, by March 20th or whatever the date is, I’m just making that up, that’s when the class starts and that’s when you’ll have the chance to give yourself the best chance to go through it together with other people. So, I’m not necessarily saying you have to restructure everything to a time based model, a cohort based model. That’s what we found that works for us, that encourages people to make a decision.

And that’s really our jobs as marketers who have products. If we don’t help a person make a decision, then they’re not going to make a decision. And it’s these tactics. It’s these strategies that are very powerful, but of course, with great power comes great responsibility. Use these for good, please believe in the product you’re selling and know that it’s going to help people.

You’re going to feel so much better about marketing something, knowing that it’s going to help people. And that helps us as well. Finding the reason to make a decision now is going to be really, really important. It may be because it’s the first launch of your digital course and it’s a beta. Meaning you open it up to people who are excited, who want to take a chance and who will get more access to you than they ever will in the future, because you’re going to work closely with them to squash all the bugs to make sure they’re taken care of because this is the first time you’ve done this.

Great. Maybe that does come with a little bit of a discount as well. And then you can increase the price later. And for marketing purposes, after your first public launch, you could say, Hey, And the next launch, we’re going to raise the price. And that’s always a good marketing strategy as well. Maybe is a reason to have a beta price or a founding members price because gosh, people will buy, they move.

Oh my gosh. The, those are our best performing sequences, the ones where at a point in time, a price will go up, but we don’t artificially do that. They actually do go up and then stay up, but you can only use that so often. So after a beta launch, going into a public launch is a great time to do that.

Perhaps you’ve had a one year anniversary of your course, your program, your consultation, whatever it might be. And you say, Hey, we’ve been up for a year at this price, it’s gone so well. We’re adding reinforcements. We’re going to need to increase the price. So this next launch that’ll be open for this period or until this date, it’ll be at the same price it was, but after that, it’s going up. So you better, if you’ve wanted this and you’ve been waiting, now’s the time to get in before the price goes up. That works really, really well. And by golly, if you’ve got your systems down, you got your emails working, you will see sales when you go down that route. It’s great.

Okay. That’s enough for pricing on the D word discount. Try to avoid it when possible. Try to have a different way to phrase it, to position it, and then set yourself up for success on that launch. And then set yourself up for success when you go into some period at which you will raise that price. All right.

Thank you so much. I appreciate you. Looking forward to serving you next week. Hit that sub button if you haven’t already, and if you think this is helpful, re listen to it, pass it around, share it with your team, whatever you need to do. I want you to succeed, and we at SPI are here for you. Let’s do this. Businesses, like, you know what you need to do. Go do it. Love you. Bye.

Thank you so much for listening to the Smart Passive Income podcast at SmartPassiveIncome.com. I’m your host, Pat Flynn. Sound editing by Duncan Brown. Our senior producer is David Grabowski, and our executive producer is Matt Gartland. The Smart Passive Income Podcast is a production of SPI Media, and a proud member of the Entrepreneur Podcast Network. Catch you next week!