How Can Discount Deals Work for You? - By Ken Burgin

A clever offer, but a few thoughts come to mind:

• Can people actually 'do the sums'? Do they know this means that, for a $700 function, they get a $35 voucher to spend at the bar? Many people find percentages hard to work out.

• Is this discount enough to shift behaviour - does it convert 'not interested' into 'what a great deal, sign me up'?

• Is it giving a discount to people who were happy to pay full price anyway?

At least it didn't look desperate, as many offers like this do.

Most discount deals are treated with cynicism: 10% off the price of tyres, a free glass of wine with your meal on Monday, spend more than $50 and have a chance to win a holiday...zzzzzz. Discounts need to be thumpingly good to make an impact, which means you've probably given away your profit margin!

When it may be worth giving a discount:

• As part of a smart 'meal deal' or function package that wraps items together for a 'special price' that works for everyone.

• When the customer pays cash or bank cheque and not credit card.

• For giving you all their business (eg corporate entertaining) instead of just some of it.

• When an event reaches a certain size.

• For paying a large deposit or paying for an entire event well in advance.

• For booking on a less-popular day or month.

Check the powerful Discount Effect Calculator to see how many customers you need for a discount offer to really work for you [Open access for one week]. Take note of 50% off deals (2-for-1). If they give you a big boost in bar takings, that's great. But do they?

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