Recession-Pricing the Smart Way


It's not what you sell, but how you sell it

shafer selling online advice pricing

THE ECONOMIC MODEL that supports most of Western Civilization appears to be in the process of a major meltdown. These tough times call for creative thinking to pry the money you need to keep your doors open from the hands of customers who are worried about keeping their job or paying their mortgage.

So let's talk about discounting and other promotions. I have said that if you run a proper operation, you should not need to think too much about discounting. I still hold to that sentiment. But you can develop (and, more importantly, communicate) discount-type promotions that entice shoppers to buy from you if they were not going to buy from you in the first place, or to buy more from you if they were going to buy, anyway.


Never give anything away for free. If you are giving something away, then a customer will not ascribe any value to it. Instead, come up with a way to tell your customers that you are buying something for them. That's what you're doing, so why not position it that way?

Some people may consider it a matter of semantics, but it's an important distinction if you are trying to discount yet retain a brand identity different from Internet discounters. For example: You are not offering free shipping; you are paying for the customer's shipping. Replace "Free shipping on orders over $150" with "Spend over $150 and we'll pay your shipping." The two statements are functionally equivalent, but the latter has more value.

Remember that your goal of discounting is to get people who would not otherwise buy from you at full price to buy from you at a price you are still willing to accept. Let's say you run a promotion that requires customers to enter a discount code at checkout to get 20 percent off their orders. In most circumstances, you would want to publicize that code to customers via advertising, like e-mails or off-line print ads, but not on your website. If someone gets to your site via a Google search to buy something you're selling, and he is willing to pay full price, why would you be willing to accept less? So use e-mails and print ads to drive incremental traffic to your store, and the discount to increase conversion.

A lot of this is going to depend on your type of business, your web traffic, and who's buying from your site. Analyze your customer and sales data, and come up with discount methodologies that will enable you to get full price from people who are willing to pay full price from the get-go.

Next, come up with methods to coax a higher level of spending. Award gift certificates to customers once they spend over a certain dollar amount ("Spend $300 today and we'll e-mail you a gift certificate code good for $30 off your next order.") You push those customers with $250 in their cart to add another $50 to get the $30 gift certificate. And on that next visit they hopefully will spend more than the gift certificate is worth. Again, dip into your analytics and sales data to come up with the thresholds and values that make rational business sense for these types of promotions.


Sell spring or summer certificates on your website that would be good for a percentage above the face value when used between certain dates in the future (the certificate's "magic window"). Here's an example: "Buy our Spring Certificate this week for $200, use it between April 1 and May 31, and we'll increase its value to $250!" If customers use it outside the magic window, it's still worth its face value ($200). "Magic window" selling enables you to get cash from customers on your books now with a potential liability for a lower margin during a set window when you should be generating enough sales to cover it.

(Fine print: I'm sure there's some accounting and/or legal magic your controller and lawyer are going to have to perform to account for future liability, cash flow, proper wording, etc., so make sure you get all that squared away before you launch something like this.)

Motorcycles and other powersports vehicles enable the ultimate escape from the strife people are enduring these days. If you're bombing through the woods on a dual sport, you typically don't have a lot of spare brain cells to worry about the mortgage.

We are in the escape business. Economic realities may dictate that people are not buying new bikes, but we can sure as heck can help them get the parts, accessories and gear they need to get out and enjoy the vehicles they already own.

Intelligent discounting and promotions in your e-commerce operation can be a huge help — for them and for you.