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Sales, Coupons, and Discounts

Let's, look at sales and coupons and alternatives. So we looked at how to enter in the allowance into your income as a negative income account, right? Um we had twenty dollars coupon there. Um, in general, I would say that if you are going to offer any sort of a discount um, whether it's a sale, whether it's a coupon, whatever it should be deliberate, like there should be a really good reason behind it. It should be measurable. What effect did it have on your bottom line? Did it actually create more sales? Were those sales still profitable? Or did you start losing money on those sales? Um and wasn't rewarded and by rewarded, I mean rewarding your customer not rewarded. You, um, did you give it to a customer because they did something that was worth rewarding them for? Did they buy more stuff? Did they sign up for your newsletter? Uh, did they promote you on twitter? Um, so that's what? I thought of the critical criteria I like to use when doing sales coupons, discounts, et cetera becau...

se pricing is marketing, um, I tend to never put things on sale. I know that a lot of people, especially if you're creating a lot of new products and doing a lot of seasonal merchandise in particular, um you know, you may want to put things on sale as they become sort of out of date because you just don't want to hold on to that inventory in your house or maybe it's not as important for you too be super profitable as it is to have the cash to be able to invest in your next season's merchandise um in that case I suppose it's fine but if you have the space I would maybe like rotate that out and wait until next season or something like that um want to tell you uh a story about a friend of mine who had a retail shop um and she found that she was losing a lot of money putting stuff on sale um and then one day she noticed that when she was taking things out of the box and putting them up on the shelf for the first time that was when she sold the most of that item. People were drawn to it because you know, of the movement I guess her bending down and picking it up, putting it on the shelf and also they thought it was something brand new they thought they were too, and in most cases they were they were taking home something that was like new and original that they could show off to their friends you know they could be the first on the block toe have it and so then she thought, well, this is crazy. I'm just going to take the things that I have in deep storage and how I'm going to start putting those out on the shelf, and so she eventually hired, basically hired someone full time, she always had one employee working at any given time putting things out on the shelf, so there were just be someone literally every minute of the day in that store, taking things out of a box and putting them on a shelf, and then either the end of the day or, you know, elsewhere in the store, people will be taking things down off the shelf, right? And so she was just constantly rotating the display and the merchandise and ok, there's, some cost associated with having an employee doing that all the time, but it was like a huge boon to sales, um, and she didn't have to, like, put stuff on sale very often anymore. Um, and she still didn't have to, you know, store all kinds of stuff in the back room, so, you know, there are alternatives to doing the discount, even if it's seasonal merchandise like if it's a really good christmas card, the red panda that doesn't need to go on sale in january, you know, they're going to be presumably, ah, whole crop of new customers coming to you next november. Next december meeting a really cute holiday card, in which case you could break those puppies out again. Um, you know, if you live in san francisco like I do and you have no room to start anything, maybe you either want to make the move into digital products or you might need to put things on sale. But in that case, I would say instead of just like blanket to everyone saying discount thirty percent off, it might be more worth it to make something that's deliberate, measurable and rewarded. So, um so what does that look like? Well, on etsy, when you create a coupon, for example, you create a coupon code, which could be, like red panda christmas or whatever you get to pick its between fifty five and twenty characters you can't have any space is, um you can check thank you. Coupon so you can have a coupon that gets sent automatically to buyers any time they purchase something from you that says thank you so much for being a customer, a customer of my store. Please take ten percent off your next order and then that is rewarded. Right that rewards a customer for buying from you in the first place um and it incentivizes them to perhaps come back and purchase something from you later on if they've gotten a really good product and they've had a really good experience um chances are pretty good that they might visit you again the next time they need something similar and if they had that extra little incentive well all the better um I know lots of merchants who used that automatic thank you coupon um you can choose your discount type so you can choose to have five dollars off it khun b ten percent off you khun set a minimum purchase again that's rewarded because it rewards on ly people who are spending a certain amount of money with you um so in the case of like the sweetmeats shop if I had thank you coupon checked and someone goes and they buy one button for me for two dollars and then they get a twenty percent off coupon that they can then use on like a fifty dollars toy I'm just lost some money there right? Eh? So maybe you want to set like a minimum purchase threshold for that and of course an expiration date that you can use for you know, seasonal offers et cetera um so when you put together a sailor coupon or a discount um in general I don't like to throw them out to just anybody unless the point is to get like eyeballs or something that people will share with their broader social network, for example, um, because it doesn't really give anybody incentive to make the purchase or become a loyal customer, necessarily. Um, somebody asked me in the bookkeeping for crafters class about how I felt in terms of offering freebies for newsletter sign ups, which I used to dio I used to offer one of those buttons for free at craft beers if you signed up for my newsletter, um, and all that did was I lost a bunch of buttons to people who didn't want to hear from me. They would put down like junk email addresses or they would put down a fake email address and it would bounce or they would unsubscribe the second they got the first email for me, they just wanted the free button. If they wanted the newsletter, they would have signed up for it anyway. Um, so incentivizing people with some sort of, like a freebie or discount, I mean, maybe a coupon, um could be good if they, you know, have to make a purchase of a certain amount, etcetera. Um but I would say that it needs to be something really deliberate. You need to think about why you're doing it is because you truly need the space um for storage is it because you want to reward a certain kind of your customers because you want to sell in higher volume um so in lieu of doing discounts and sales I used to do volume listings on etc so if you bought you could buy you know, a small plush ham you could buy a small push stake you goodbye saul push pork chop or you could get all three of them for five dollars off and it was called a meat medley and it was a separate listing and photographed all three of them together and that was very, very popular. People love the idea that they could get a whole collection and pay less for it. Um and that was great for me because it moved more product more quickly but you know, instead of sending somebody a coupon that said by to get, you know, five dollars off the third I was able to just combine them into a single you know product um and it also meant that I got mohr listings and more different listings even though it was still the same three products I got four listings out of it, right? So that meant I appeared four times in search results as opposed to just the three um and so on and so forth so I mean, there should be a real good um reason behind it um the way that you can do this sort of rotating thing on it sees you can make a listing inactive um if you're not familiar with this when you have your listings, you know they tend to like expire and then they go away so you could either leave them expired for a while and then just renew them later or there's a choice to make something a listing in active, in which case nobody will see it but all the information is still there the title, the price, the photos, the description and then when it comes time for next christmas season, then you can put that holiday panda card back up there and lots of people will think it's new it's new to them, right? Um okay, so we've talked about sales and coupons and some alternatives do we have any sort of final questions about anything we've covered here today? Anything at all it's really interesting because just started a discussion now about what how people handle it is very interesting the way they said basically saying people saying no don't offer any discounts a group of your people stuff is worth it if you know people don't want to buy, they don't want to buy it yeah, I mean pricing is they're not sure right there not sure I do awesome or if they're just continue looking for discounts yeah, I mean that's sort of the rub isn't it is that because pricing is marketing it has an effect on the perceived value of your product if you've got, you know, a set of products that are full price and then a set of products that are on sale if it's not very obvious that they're like, you know, these are the holiday things and it's january so whatever um then it starts to create a perception that there's something wrong with these products that are on sale like I don't think it necessarily incentivizes mohr sales if I see a shop where some products are on sale and other ones aren't and I can't immediately tell why I assume that it's because those particular products that are on sale we're not popular and then my brain goes well, why weren't they popular? Why didn't people like them and want to buy them? And even if I can't figure out a reason in my head there's just a little something that saying there's something wrong with that thing I'm not I don't want it either. Um so that's sort of the problem with the sales and the coupons and discounts that's why? Well, the sales particular in particular um coupons are fine is like a reward as long as you can track them um and with the discount code you can track your coupons in particular on etc if you're just doing like a sale or a discount or some other thing it's a lot harder to track it um but it's again a nice way to be able to track your marketing efforts if you're making a code that you're just sending to your newsletter subscribers or even just a subset of your newsletter subscribers then you can see exactly how many of them bought something with that code and you can see well, I sent this to this newsletter to a thousand people ten ten of them bought something using this discount code that newsletter effort had on this was a term I brought up in the bookkeeping for crafters class one percent conversion and rate I converted one percent of my newsletter subscribers into buyers uh so if you're doing it to be able to measure your marketing efforts that's fine that's great if you're doing it to reward your customers for being loyal or for purchasing mohr or for helping promote you helping market your business to there broader audiences they're friends et cetera those air all perfectly good deliberate reasons to give people a lower price or give them some sort of a sale discount coupon um just making things a lower price willy nilly doesn't always have the effect that you wanted to um and I think that's all I'm going to say about that for now mother any final questions from the broader audience well, actually we did have a question about how you deal with the requests for refunds on digital products if you have you had any experience of that I mean and then you're dealing with your paypal and credit cards and all of that well um I have not personally ever had someone request a refund on a digital product I'd have to look that up I assume that it's he has something in place for that uh and it just really good that's reverse the transaction but you can't touch you take back a digital product you know, you can't take back a digital products so again, like I mentioned with the piracy it's possible uh for people to just kind of rip you off when it comes to the digital products a cz convenient and as lovely as they are that's the risk inherent in those things um you know, the buyer would I assume have to give you a reason and then eller excuse me etc has that cellar protection policy in place? Um so you are protected a little bit on that end as well, you know, there's really nothing stopping him from taking that digital product and then distributing it out to the whole wide world um or trying to make money off of it themselves um I don't find that to be like a systemic problem on etsy um you know, I haven't really heard of any cases where somebody demanded a refund and less like let's say the file itself didn't open or the download didn't work uh some reason like that which usually you can fix um but as faras just like opening it up and not liking what they see I haven't really ever heard of that happening that would be really strange because presumably you have some sort of images of like what people are getting um so on and so forth I would have to ask someone who sells a lot mohr digital products than I do I mean I sell a couple of digital patterns in the sweetmeat shop and I saw that wedding invitation um but I probably only sold you know, a digital product maybe one hundred times or so and certainly hasn't ever come up in that one hundred times so I'd probably have to talk to someone who sells like thousands of them um but any information that you need about things like refunds you confined on etsy's blogging in their in their help section in the support section on etc they definitely address refunds on digital products while people are posting actually advice in this as he does actually have a policy on this issue I'm remembering now I actually bought a piece of software that very next day my computer crashed and I lost it and they said well tough luck you know oh that you bought it, you bought it. Well, you know, the people are very strict about this, and quite obviously, I could have claimed anything, write and say, you know, then send me another one. So, yeah, I think, prepared yates. He do indeed have policies on this. I know that in, like, that case, in particular, digital products on its ear, up for a certain amount of time. So if a buyer purchases a digital product, they have the ability to download it. I forget what it is they have, like, two, two weeks, or something in which they can download. So if your computer crash the very next day and the last that you could probably still get it, um, a little further in the future, but, yeah, they're not up for a limit and unlimited time, um, and there's. A reason for that, of course.