What are your thoughts on using discounts and promos to attract new users?
John
12 replies
Share your experiences and the results of such campaigns. Thank you.
Wishing you a great weekend and a happy Father's Day to all fathers.
Replies
Shajedul Karim@shajedulkarim_
hey there Mike,
promos and discounts are a double-edged sword. when wielded right, they can attract a wave of new users. but there's an art to it.
1. right reason: are we using discounts to offset an inherent product weakness or to amplify a strength? the former can lead to an unsustainable cycle of discounts.
2. right audience: are the attracted users right for the product or are they just discount chasers?
3. right timing: seasonal or occasional discounts can create a sense of urgency and exclusivity.
4. right measure: don't discount your product's value. charge what it's worth, then provide additional value.
5. right transition: have a plan to transition users from the discounted price to the actual price. sudden changes can lead to churn.
discounts and promos should be strategic, not reactive. and in the end, your product's inherent value and usability will outshine any temporary price cut.
wishing you a productive week ahead. happy father's day to all the fathers out there. ✨
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It's a good strategy if done sparingly. There will always be lurkers who either
1. Loved your product that is priced out.
2. Are naturally deal hunters.
If there are a lot of these in your pipeline, then deals will be hugely successful.
What you don't want to happen though is to offer deals too often such that it ends up cannibalizing customers who will be willing to pay full price. And this often happens when your deals have some sort of predictability.
@heyjoshua I was thinking about users paying full price too. but then looking at web hosting companies that provide lower rates for the first year or two, followed by regular pricing upon renewal. This allows users to assess the product's suitability and continue paying the standard rates if it meets their needs. maybe mixing it up with holiday promos and the yearlong discount could be worth a try. Thanks for your input :)
@thesystemarchitect68 yah! This was actually a decision point we had for our product just recently when we decided on our pricing strategy.
And studying a couple of other companies, there are nuances on when we felt this can work.
Quickbooks for example, sometimes offers as much as a 70% discount on their product for a quarter. Though looking at their product, once a business' accounting system has been setup, it's pretty much difficult to churn. On another hand, we had another SaaS who won't be named, that offered the product to us at 50% discount and we cancelled right before renewal.
So what we gathered from this are two things
1. If the product has a high friction to move out off, then huge discount will work.
2. Otherwise, too high a discount will be bad as the users will peg the value to the discounted price.
@thesystemarchitect68 and yah, the same scenario here. It's relatively difficult to transition to another web hosting company for the price difference. So it works for them.
Discounts and promos can be effective.
The key is to not overuse them unless your value prop is low cost.