As you probably recall from previous posts, discounting isn’t one of my favorite marketing strategies. In fact, one of the Burtisms I emphasize in my ECHO Marketing program is, “Don’t cut the price, build the brand!” I will urge you in the vast majority of cases not to lower your price, but to instead focus on ways to increase the value you deliver for your customers in such a way that they don’t mind paying a premium. On the other hand, we have to be careful not to overlook a strategy because we mislabel it.
Consider how Disney allows a person free entry into one of their theme parks on the person’s birthday. At first this looks like a discount. In fact, one could estimate that the average discount is 25%. For example, if a group of 4 visited the park, and one person attended for free, then the promotion was basically 1/4 or a 25% discount on the admission. However, the admission charge is really just a bonus when you consider Disney’s business model. It’s about as sure a bet as you can find that the attendees will spend enough on merchandise and concessions that will be bought inside the park to more than make up for any such “discount.” In reality, that discount of allowing free attendance once a year is a very insignificant marketing investment with potentially very significant returns!
You may find this Disney Lesson is something you can modify and put to work in your own organization, but the real lesson for us all is to remember to constantly seek profitable ideas from every possible source.