The Power of Discount Pricing

Here's an interesting conversation about what sort of discount offer will actually motivated an impulse purchase. September 27, 2012

You know the setup: you’re walking by the bandsaw booth and you really don’t need any more bandsaw blades or gizmos, but there it is, a circle cutting attachment, regularly $49.95, with a big sign “Show Special $25!” At what point do you give in and buy it? (Category “nice to have, but wouldn’t use it much…well, maybe at that price”.) I’m wondering how many items to lug to a show this winter. I may have to fly, so freight costs are a factor.

Forum Responses
(Business and Management Forum)
From contributor K:
For smaller items such as the one you referenced, I usually find myself ready to purchase when they have demonstrated it in front of me (or had a video) and then I to try it.

I'll never forget a purchase I made about eight-ten years ago at a show. It was basically a horizontal drum sander. On one side was 60 grit and the other side 220. He would grind it on 60 to make it rough and then 220 to show the difference - no big deal. He showed how it would be useful for edging smaller parts, and had me try it. We make a lot of our components to minimize waste, and this appealed to me at the time. Enough so, to drop $400 on something I could have made for half that.

From contributor E:
I usually am shopping at the shows for new items, time savers and to stock up on s lot of small things that I would otherwise be paying freight on. For an impulse buy on a small item, say $100 or less I'd expect at least a 25% discount as a show special. Bigger items I am usually more interested in the demos and I'll shop price where ever I can find the item.

I should say, since you are an exhibiter apparently, I am going to woodworking sows less because of the costs. Even the hobbyist shows are now getting $10 to park, $10 admission and that's after a 50-100 mile trip that costs $30 in gas, so I am into it for $50 by the time I get into the door. If I get inside and there aren't any real deals, I'm not much in a mood to spend.

From contributor W:

I bought a two headed 42 inch widebelt sander at a show because they discounted it from $35,000 to $28,000. I wrote them a check for half of it on the spot. After the machine arrived they tried to bill me $35,000 saying their salesman was not authorized to sell it for that price. Since it was his signature on their stationary I figured it was mine for $28,000.

The same company (a large - still in existence machinery vendor) was not very cooperative when it came time to sending me installation specifications. All I had to work with was a color brochure that showed the entire line of sanders. Whenever I would call it seemed that everybody was in a meeting.

Two weeks later my electrician was in the building and I still did not have the data I needed. I then became very belligerent on the telephone (emphasis on belligerent). I told the poor woman who was talking with me that I didn't care if they had to get the president of the company out of the meeting and that I was going explain what their post-sale behavior was like. Miraculously it only took about five minutes for the meeting to end and the fax machine to start spitting out what I needed.

From contributor T:
You might consider offering a show special bundle. "Buy our new item at the show for only $199 and receive a free shop package valued at over $50". This way you aren't eroding your price integrity and you'll also benefit from the power of the word “free”. I worked for Shopsmith a long time ago and they had a different offer on the purchase of a Mark V every quarter that was roughly valued at $250.

One quarter was always $250 off the retail price, and the other three quarters were at full price, with a $250 free something or another. Not only did we always sell more machines at full price with a free accessory, but surprisingly people who purchased at full price would also purchase more add-on items! I suspect the folks who couldn’t afford full price would sit and wait for a discount price before biting and that’s all they could afford, while those who were getting something for free felt justified in spending a little more.

From the original questioner:
I could offer something like "Buy a plywood pouch at the regular price of $64.95 and get your choice of a free sliding compound miter saw cover or a folding tablesaw cover". Many woodworkers could use a plywood pouch, and most have one or the other type of saw. I like it!