Re-thinking discounts. Kind of.

A while back I wrote a post about a bunch of ways to run discounts.

At AppPresser, we’ve always been in favor of discounting, as long as they are timed appropriately. I don’t think it hurts our brand, it gives people who are on the fence a reason to take the leap.

Our biggest month of the year is always November because of our Black Friday/Cyber Monday deals. We had a couple of issues last year that made me re-think our strategy a bit this year.

For the past 3 years we offered a 40% discount, which is much larger than any other discount we do throughout the year. This year we did a 25% discount instead, and here’s what happened: the number of sales and total revenue were about the same as last year. The smaller discount amount didn’t hurt us at all.

Here’s why I think it actually helped us in the long run:

  • Last year there were too many refund requests after the sale. Too many people purchased just to kick the tires, but weren’t serious buyers. This hurts our relationship with our payment provider, and generally is not fun.
  • Last year December sales sucked. Everyone who was mildly interested bought in November, so we basically borrowed revenue from the future.
  • Support is crazy when that many sales come in at once, which is a big drain on the team. I’d rather have a steady amount of sales over 2 months than get them all in one month, if all things are equal.

I won’t have the final numbers until the end of the year, but I’m confident that offering 25% off instead of 40% off will decrease refund requests, allow for more sales in December, and be easier on support.

That’s a win – win – win in my book.

Hey friends – I’ve noticed your BF/CM sales are all different percentage amounts. Do you have anything you want to share about how your sales went this year?


Get more content like this

Get valuable insight on business and money in your inbox once per week.

Posted by Scott

  1. My gut reaction is that this makes total sense and probably has little or no impact.

    The incentive is still there, but you are also finding a sweet spot for pricing/value. There was a big incentive with the release of CartFlows and I spent the better part of the day learning about what it is, will be, and considering it’s value. In the end, it’s a much lower risk to just pay more when it is fully developed.

    Another point my dad made to me during Thanksgiving was related to a display I wanted to buy at an insignificant discount. It is a vendor assured color accurate 30bit display at a premium. He is an EE and works in video programming FPGA’s. His comment was “is that what you do?”. After considering what he was asking for a while I realized that I don’t game so I don’t need high refresh rates, and I don’t work in video so the color accurate 30-bit display premium is not really relevant to me. His single comment saved me about $1000.

    The Thanksgiving incentives are super interesting and I appreciate your story!

    Reply

  2. Thanks for sharing this, Scott. There are quite a few strategies out there, and you can almost always find pros & cons for them all.

    I launched my first ever product in July of this year, so this was my first BFCM. I considered offering a discount, but decided against it. What happened…?

    I sold more plugins on Black Friday than any previous day since I launched in July. 10 total sales (1 refund, so a net of 9).

    I average 2.5 sales/day, and my previous high for sales in a day was 6. So without even offering a discount, I had my biggest day of the year.

    It’s worth noting that I list my plugin at a value of $39 and offer it for $29. That’s the “regular price.” So it does present itself like a discount anyway. But this is how I’ve listed it since day 1. And with no further discounts or marketing, I had my biggest day by far.

    Perhaps there’s something to be said for displaying it this way all the time. And also maybe people just shop more on Black Friday so sales will go up even without offering a discount. If you have the only product of your kind, or your product is far superior than the competition, people will buy it regardless. (not at all saying my product is the greatest thing ever… just trying to find some conclusions based on what I experienced).

    Reply

    1. Hey Dave, thanks for sharing your experience. I agree that sales seem to go up across the board, just more people shopping online that weekend.

      Reply

  3. Thanks for sharing this Scott. It is super interesting to me, who dislikes offering discounts, but takes advantage of them, and who’s n been in the product businesss for real for 18 months. The support and refund aspect is particularly interesting.

    It’ll also be I nteresting how this plays out in a year come renewal time for the 40% vs 25% crowd.

    Reply

    1. Ya I tend to think renewals will be higher, but I’ve also come to think that renewal rates are mostly a function of how much value you continue to provide a year later. The purchase price has less to do with that.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Want to learn more about mobile apps and business? Enter your email below.
Holler Box

Ionic + WordPress

Enter your email below and I'll send you more details on my Ionic + WordPress toolkit.
Holler Box