Q&A: Is there a better way to offer discounts to customers?

This transcript was generated from the episode audio and may contain minor errors.

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One of the most effective things you can do to inspire buyers to take action is offer a discount or have a sale or some other type of promotion. It is incredible just how much more responsive people can be when they see your product, they see your service. They're like, oh, that's cool. Maybe I will buy that at some point. And then you offer them a discount or you put on a flash sale and then they're like, oh, I must have it now, right?

There's this weird sense of urgency that comes about. And smart business owners or smart companies, I guess we should say smart people who work at those companies know this. And sometimes they even publish sale prices by default. In other words, there's always a sale price. If you go into a department store, for example, depending on the store, you might notice that just about everything is on sale, quote unquote.

And they do that because they want to encourage people to purchase. So today's caller has a question about this. And by the way, I should say, welcome to Seidl School. Thank you for tuning in today. My name is Chris Guillebeau.

I have the honor of hosting this ongoing dialogue all designed to help people create more freedom for themselves through the form of a moneymaking project. Now back to today's caller, she is seeking advice on managing the process of giving a discount. Her side hustle is growing. She's using a wise strategy of offering a discount after the first purchase, which I'll talk a bit about in my answer, but she's worried about the bookkeeping process. So we'll leave it to her to explain more her question and my answer is coming up after the break.

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Hi Chris, my name is Shazlyn and I'm an artist based in Toronto, Canada. I've been listening to your podcast since 2018 and I have to thank you for helping me launch my side hustle. My question is about discounts for repeat customers. I sell my artwork on my Squarespace website. When customers share their purchases and tag me on Instagram, they get a one-time discount on their next purchase.

I currently keep track of them in an Excel sheet and the discounts are applied as refunds after payments are completed, but my sales are increasing and I worry I might overlook a customer who tagged me. I also feel giving discounts in the form of refunds is inefficient. Is there a better way to do this? Thanks and I look forward to hearing your thoughts on this. [Music]

Hey Shazlyn, thank you so much for the question.

Thank you for being out there and congratulations on all that's happened so far. Listeners, if you wanna check out her website, it is herserong.com. So, H-E-R-S-A-R-O-N-G.com. All right, so first of all, great strategy, really smart both in terms of pricing so that Shazlyn doesn't have to discount the first purchase, like she offers a discount, but the discount is for the second purchase. And then also in terms of encouraging this social sharing.

Second, I do agree it's inefficient to manage it this way. And the greater issue is that the customers should be able to see their discount being applied when they purchase. Like there's just something psychological about seeing the price drop when you add that code to your shopping cart. Even if you know you're gonna get refunded later, I just think that real time action helps. So basically what Shazlyn needs to do is one way or another, she needs to get the discount codes to customers, those customers who have already purchased and then shared online without giving them to everyone.

So to me, that's the problem to be solved. She might already have an idea of how to do that, could be a few different options. One way would be to send a direct message to them with the code. So whenever she sees she's been tagged with something, she sends them a message with the discount code and it also creates another personal interaction. Of course, this still requires some effort.

You know, it is a manual process, but to me it seems easier than manually tracking them in an Excel spreadsheet and then manually refunding them after the fact. She could also include a note about this when she offers them the discount. She could say, if you share your purchase and tag me, be on the lookout for a discount code. And if you don't see it in a day or two, send me a DM. And that way the customer knows, oh, the discount code is gonna come to my messages and if I don't see it, then I'll just message her and get it.

Like I said, there could be a more efficient way, but this is at least some improvement over the current process. Good luck, Shazlyn, keep hustling. And listeners, if you have a question, come to sidehustleschool.com/questions. Thank you for tuning in today. We'll be back tomorrow with a story.

My name is Chris Guillebeau. This is "Side Hustle School." [Music]

- From the Onward Project.