Today, everyone likes a bargain.
People are only willing to pay top dollar for things that are limited in production and command a high price, think of any good that sells out, in most cases artificially so.
It’s why Zara is beating just about every other retailer out there and why H&M has watched their growth remain steady while the likes of other big brand stores have plummeted. These two examples are all about speed and scarcity.
Scarcity and urgency are the only two things that matter in business. Make something that people want and figure out a way to motivate them to convert. In today’s culture, there are things that people will only purchase if they can get a discount.
Example, I’ll never pay full price for clothing or shoes. I could, it wouldn’t be terrible to do so, but those markets overproduce and misjudge their sell through so badly that you can always get a good deal. They also have a substantial markup built into the product.
Same goes for a software product. An experienced person will know that you can always work a deal, if you wait til the end of the month when the company is crunch over hitting numbers, you’ll get your best deal as well. (Still weirded out that we look at numbers on a month over month rather than a cumulative 90 days or so but a topic for another day.)
But everyone does love a bargain, but when you pair that bargain with scarcity and urgency, think limiting amount and time here, your conversion rate, the only thing that matters will 10x at least.
The beauty is, it doesn’t matter what the product is, as long as you find the right market for it.
Flash sales work. If you know your margins and aren’t afraid to fire a few clients, I would really suggest using them.
Consumer goods, should use them and slim their margins because the lifetime value of that customer will make up for the discount.
SaaS should use them because they forget that they can always fire a client. Sign shorter contracts, if you’re product is good and sticky for the business, they’ll happily pay more down the road, if it’s not a great fit, you don’t have to chase them in collections. Note: many companies do month to month these days with a cancel at any time feature, this gives customers the satisfaction of knowing they can walk away and lowers the barrier of entry to try.
I shop and if I see something say 1 left or sale ends Thursday, I’m a lot more likely to buy, it’s getting a perceived value of something, even if the excess is just arbitrarily baked into the product itself with no plans of ever selling at MSRP, hell car companies have been doing this for years.
Create a culture around providing psychologically what people want, a deal, and you’ll watch more deals close.