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jimr451
05-27-2010, 09:24 AM
Hi all,

I'm a web consultant, established, with a decent list of small business clients. Many of my clients are repeat business - they come to me when they need advice, or want to add / change something about their website.

In the last month or so, business has hit the doldrums - few clients are doing new projects, and the number of new clients coming in has been slow as well.

Ok, so I'm thinking of offering this to my existing clients:

"Any work done during the month of June will receive a 15% discount."

Basically, I want to spur some projects, and rather than increase my advertising spending, why not offer my clients a nice discount? So, any work they have me do during June, they get a discounted rate.

Does anyone have thoughts on this? I've got a nagging feeling that there's a big downside here, but I can't really think of it (besides the money I'm giving away).

Thanks,

-Jim

Steve B
05-27-2010, 10:05 AM
I think it's a good idea.

The downside is that you might train your customers to wait until the next sale, but I think you can overcome that by making it clear that it's a one-time thing. If you do it too often, you'll have trouble getting your full price again.

Spider
05-27-2010, 10:55 AM
As Steve says, if you regularly give a discount - a weekly discount coupon, for example, you will never sell anything 'full price'.' In fact, you won't have a 'full price' - you will only have your regular (discounted) price. That's not necessarily bad - pizza and sandwich shops seem to do a lot of that and thrive. In your business, that might not be a good idea.

I think a one-off situation as you describe will be fine - especially if you explain it to your clients and play up on the reason to their advantage--

"We are finding business rather slow, right now - perhaps you are, too. But we are convinced that business will pick up soon - for you and for us. When that happens, you will be busy and less able to spend time on your next website project, and we may be so busy that we cannot deal with your project as quickly as we could right now.

Therefore, we want to encourage you to get a headstart on your next website project. You have more time right now to go into the details. We have more time right now to give you the utmost in service and attention.

Both those facts give you an advantage over your competition. Add to that, a xx% discount on all work we do for you during June, and you can see a triple-advantage in starting your next project now."


I think you would get a better response by offering the discount for the entire project provided it is started before June 15th, but you must do your calucations to see how that might work out.

I hope this helps.

vangogh
05-27-2010, 02:58 PM
First let me agree with both Steve and Frederick above. In fact I think Frederick has given you a pretty good template to use in an email to your clients.

A one time coupon is fine and the danger is that if you offer it too often you're effectively lowering your rates. Even if you don't offer it too often you may find some clients will still wait on the next coupon.

There are things you can do that don't require a coupon to get business going. One is simply to reach out to your clients and say hi. A few years ago things had gotten slow for me heading into the holidays. I sent out a short email to most of my clients wishing them a Merry Christmas and Happy Holiday Season. Business picked up in January and I had one of my better months. The short email I sent just reminded people I was around. Several had been wanting to do some work on their sites and the email pushed things to sooner rather than later.

You can also look through your client's sites and think of ways to improve them. Real improvement that will affect their bottom line. Again send a short email to let them know or maybe a slightly longer one with some of your ideas. Your clients may not jump at our ideas, but if the ideas are genuinely good it will get them to consider it and possibly act on it. It's a win-win since you get more business and help their business.

Try marketing in places where you currently aren't. Maybe the solution is so much getting your existing clients to send you more work, but to pick up a new client or two. Marketing doesn't have to mean spending money on advertising. You could put more time into engaging people online or offline in different communities (social sites like Facebook and Twitter, offline networking groups, etc). If business is down you should have more time to spend marketing. You might just need to reach out to different people in a different place.

Start developing some projects for yourself. It probably won't help with the current situation, but it can help prepare you for the next. Since you know how to build websites, build one for yourself that can make money for you. Create and sell a product, promote affiliate sales, write an ebook. You probably won't see money from the site next month, but you very well might see some next year when you encounter another slow month.

KristineS
05-27-2010, 03:31 PM
You could also use a discount to try and spur some referrals for additional clients. Maybe instead of a straight 15% off in June, you offer 15% off your work if you refer a customer in June. That way you're building up your client base.

jimr451
05-27-2010, 03:56 PM
Thanks for all the ideas. I definitely will stress this is a "one time" deal - In fact I was going to tie it to the recession or the summer doldrums somehow.

Of course, I've also had a slow week followed by an avalanche of emails / calls the next week and more work than I can handle. Sometimes there's no explanation.

Thanks again - I think I will "pull the trigger" on this, and I'll follow up in a month and let you all know how it went.

-Jim

huggytree
05-30-2010, 09:26 AM
i tried giving out business cards with $20 off coupon on the back. instead of handing out 1 card at the end of the job id hand out 3 of them and ask to give them to friends for the coupon...after 6 months+ this has done nothing...ive had 2 redeemed and only in the past 2 weeks...1 was a new customer and i could tell they were the type who would have used me anyways and the other was a repeat customer who definitely would have used me.

ive thrown out the rest of these coupon business cards...

i have offered discounts when work is very slow and they do the job ASAP. this has worked out well, since they were the type of customers i would have lost due to price. I typically still make a bit of profit on them still...better to make 90% of your price than $0 if your going to be sitting at home.

I was incredibly slow in Feb. this year and did a bid on a long shot...well i got the job 4 months later when i was very busy. my price was horribly underbid...i made no profit and probably didnt even make my normal wages + the customer thought they were over paying and complained about the extra's even though i gave a bit of a deal on them too....and they had a Dodge Viper in the garage...they were the type of customer that having higher prices avoids...cheap customers expect the most for their money.

now when i give ANY discount its only for jobs im doing right now, not in the future. I dont do if often, but as the recession worsens i have to do it...i

everclean
06-03-2010, 11:12 PM
Instead of a discount, why not offer to throw in "x" for free? That way you don't send a message that you could charge less for what you ordinarily do, and don't get anyone thinking that you can actually work cheaper. Perhaps there is a little something you can throw in with what you ordinarily do, at your customary pricing structure, that might add a little value rather than devalue your services like a discount. If you don't have something you can offer for free easily, perhaps you could come up with something. People love free. They'll often pay more for something if they think they are getting something free on the other end.

vangogh
06-04-2010, 01:55 AM
Instead of a discount, why not offer to throw in "x" for free?

This wouldn't apply specifically to what Jim is trying to do, but one good way to use the throw in "x" for free idea is to do it in away that requires a second person. For example a trial gym membership where you offer a month each to two people for the price of one month. In order to take advantage of the offer you need to enlist a friend. The gym gets 2 potential customers instead of 1 for the month. Ideally both would continue on to take longer memberships, but if only one of the two continues it's still likely profitable.

Something similar could apply to most any service business.

bizjunkie
06-05-2010, 05:06 PM
All great information - my suggestion - try it. If it works keep it in your bag of tricks -if it doesn't try something new. Businesses need to constantly be reiventing the way they market new business.

Also, look around at your competition - locally and nationwide - see what they are doing to build business - copy the good.

Brian
06-06-2010, 04:40 PM
One thing I have done with my contracting business is to "pre-sell" work. Winters are traditionally slow for us and while we can do exterior work every month of the year, in the winter we prefer interior work (fewer weather issues). Starting in August I begin offering a discount to customers with interior work if they will wait until the winter and allow us to schedule at our convenience. I do a similar thing during the winter for exterior work.

This has worked fairly well for us. We often enter the winter with a fair amount of work already scheduled. Since I collect a deposit to secure the pricing, I also have use of the money (and the small interest it collects). The customer saves some money, so it is a win-win.

I realize that this doesn't apply to the OP, but it is one way to smooth out some of the peaks and valleys in a business that is seasonal.

vangogh
06-07-2010, 10:37 AM
Preselling is a good idea. I think it makes a lot of sense for businesses that are seasonally dependent. You offer a good deal to customers to help you maintain a better schedule for you and you help fill the schedule for the next season. The one danger is that your customers may start to realize these discounts come every year and so they only call when the discount is active instead of paying full price.

jimr451
06-24-2010, 07:35 AM
Hi all,

Thanks for all the input on this thread.

Here's a followup. I sent an email out on June 1 to a select group of clients ("good" clients), offering a 15% discount for any work done in June.

The response was positive - at least one client put a long list of items together just to take advantage of the discount. Others responded positively, and sent work my way (not 100% sure the work wasn't coming anyway).

Bottom line - it has worked well, kept my "queue" filled up all month so far, and gave me a good reason to reach out to some long time clients and build some goodwill.

My plan is to not offer this again until maybe next summer, just so clients don't get trained to wait.

-Jim

vangogh
06-24-2010, 10:37 AM
Thanks for letting us know Jim. Sounds like the discount was a success. Something to keep in your back pocket for those slow times. I think it's good you don't offer too often, but every so often without a easily discerned pattern can work.

You might want to try changing the discount next year too. 15% worked. What about 10%?

KristineS
06-24-2010, 02:25 PM
You hit a good point on the head there Jim, you weren't 100% sure that the work was prompted by the discount. If you would have had the work anyway, than basically you just gave away 15% of your money.

Next time you might want to try and target customers who need to be nudged or who haven't ordered for a specific period of time. You want your discount to prompt business that you wouldn't otherwise have had.

Spider
06-24-2010, 02:44 PM
You hit a good point on the head there Jim, you weren't 100% sure that the work was prompted by the discount. If you would have had the work anyway, than basically you just gave away 15% of your money.
Next time you might want to try and target customers who need to be nudged or who haven't ordered for a specific period of time. You want your discount to prompt business that you wouldn't otherwise have had.OTOH, if I was one of Jim's regular clients and I discovered he was giving a discount to an infrequent client and not to me, I'd be pretty upset.

No, I wouldn't ask for the discount - I'd take it as a measure of how much Jim is interested in my business and start looking for another supplier who thought more of me.

vangogh
06-24-2010, 07:49 PM
Frederick I think the discount was more for the regular clients and not for the infrequent clients. I could be wrong, but I think it's the opposite of what you described.

I'd add that in his line of work, most of his clients are unlikely to find out, though it's certainly possible that they may. If the discount was given to those clients who are more frequent then I don't see how infrequent clients could be reasonably upset. It would be explained as a way to reward more frequent clients. If some infrequent clients did get upset and move on, it's not a huge loss and if anything it might get infrequent clients to become more regular clients since they would realize that sending more work to Jim could lead to discounts on the work.

Spider
06-25-2010, 08:55 AM
VG, I was responding to Kristine --
...to try and target customers who need to be nudged or who haven't ordered for a specific period of time. You want your discount to prompt business that you wouldn't otherwise have had.
Jim started off discussing a discount for good clients, to prompt them to do exactly what Kristine suggested not - that is to give them a discount on work Jim WOULD have received, anyway, but now at a time that better suited Jim. I am opposed to discounts for new or infrequent clients unless the discount (or another discount) is given for loyal repeat customers. It seems to me a much better business policy to reward one's loyal customers and not the drive-by and the sometimeish buyers.

vangogh
06-25-2010, 12:12 PM
Oh my bad. I thought you were replying to Jim. In that case I completely see your point. I agree about rewarding loyal customers and not the not so loyal customers.

KristineS
06-25-2010, 01:18 PM
I agree you should reward loyal customers too, but I don't know if a discount is the way to do it. I suppose in this case, the discount might have spurred some people to have work done now that they might have waited until later to do, so in that sense it worked. I'm just saying that is most of the work that was covered by the discount was work that he would have gotten in any case, than he was mostly giving away part of his profit.

It's kind of a judgment call thing. If the discount spurred loyal customers to have work done that they otherwise wouldn't have had done, then it's a good thing. If it just gave a percentage off work that would have been done anyway, than it didn't accomplish the goal.

Spider
06-25-2010, 02:57 PM
...If it just gave a percentage off work that would have been done anyway, than it didn't accomplish the goal.But it did accomplish the goal, Kristine - which is my point. Jim's stated goal was to bring forward into the month of June client work that would otherwise be done later---
...In the last month or so, business has hit the doldrums - few clients are doing new projects, and the number of new clients coming in has been slow as well.
Ok, so I'm thinking of offering this to my existing clients:
"Any work done during the month of June will receive a 15% discount."
Basically, I want to spur some projects ...Jim's offer was right on target and seems to have achieved the required outcome. Well done, Jim.

Furthermore, I would argue that discounts to regular customers on work that would have been done anyway, is of itself a good thing. Whether you call it a loyalty discount or just a give it 'cos they are nice people, it is another step in turning regular customers into raving fans.

My wife (on my instigation) gives regular customers a discount every time, and charges full price to all new customers, letting them know that if they bring their dogs regularly, they, too, will receive a discount. In her case - an in many (most?) businesses - dealing with regular customers is a whole lot easier than dealing with new people and can therefore be done more efficiently (thus costing less.)

Some of our clients get an additonal, unpublicized "favorite" discount, for no other reason than the dogs are especially happy animals and easy to handle. Guess who we get most referals from.