Business development · 18 April 2017

How not to run a price promotion (and what to do instead)

Price promotion
The emerging “experts industry” is a sector where price promotion tactics are commonly implemented
For his latest Business Advice article, Grid Law founder David Walker explains thelegality behind running a price promotion, before outlining the best ways to legally market product offers.

Special offers and discounts can certainly boost sales, but occasionally they can seem too good to be true.

I often attend business seminars and conferences and sometimes watch in disbelief as the experts? and business gurus? sell their products and courses from the stage. I sit there, confused, thinking Is this a good deal or not

This experts industry? is rapidly growing in popularity so Im going to use it as an example of how not to run a price promotion. At the moment, it seems to be one of the worst industries for flouting the rules and if they’re not careful, they will face a heavy clamp down by the ASA (Advertising Standards Authority).

If you havent been to one of these events, this is typically how a presentation will unfold. After giving a talk for an hour or so, the expert? will start a sales pitch along the following lines:

if you like what you’ve heard and would like to learn more, then I have this course on offer. it’s the number one training available on this subject and usually it’s 10, 000. But, just for today, Im going to make you a very special offer.

Im going to throw in two, free bonuses. The first is another course I teach worth 5, 000 and the second bonus is a one-to-one coaching session with me.

My high-end coaching clients regularly pay me 25, 000 a day for my advice, but you’re getting access to my 20 years of experience for a fraction of that price. If you add everything up, Im giving you an amazing 40, 000 of value.

However, if you’re one of the first 100 people to sign up, all of this is yours for just 2, 000. That’s 95 per cent off! But, you have to hurry. This offer is only valid right now and it’s not going to be repeated. When the places are gone, they’re gone.

What a bargain!

When the speaker has finished (sometimes even before they have finished) there’s a stampede to the back of the room. Everyone is pushing and shoving to make sure they don’t miss out which fuels the buying frenzy even more. When they’re finished, the expert? has pocketed a cool 200, 000.

Not bad for a morning’s work, but is this actually legal?

Im not even going to consider the quality of the product that could be a whole other article. What Im interested in is the way the price is set and how the sales pitch unfolds. (Please note that these figures Ive quoted are just an illustration, but they’re not far from the exact pricing given by one particular business guru? Ive seen speak several times.)

So, let’s break this down, point by point.

Who says this is the number one training Based on what? Is it the most popular or does it get the best results? Compared to who? Unless these claims can be backed up with evidence, they shouldnt be made.

Are the bonuses really free? If the price of the package has been inflated to cover their cost, they’re not free.

Also, do these bonuses ever sell on their own? Are they genuine, stand-alone products and services, or does the package only really work when all of the elements come together? If they’re not truly independent products, they’re not a bonus.

Next, let’s look at the price. Is what’s being offered really worth 40, 000? Possibly. Who knows? Everyone is free to charge however much they like. The important question to ask is whether the expert has actually sold any of these packages (or its individual elements) at this price.

it’s not enough to advertise them on a website for 40, 000 if they never sell. If they are only ever sold at these business events for 2, 000, then the true value of the package is 2, 000, not 40, 000.

Therefore, you’re not getting a 95 per cent discount, you’re paying the full price for the package.

The terms of the offer are also unclear. Unless you’re really concentrating (and remember that on stage this sales pitch will be much longer than the paragraph I have summarised above) you may think you’re getting a day’s one-to-one consulting as part of the package worth 25, 000.

You don’t know if you are. All that’s on offer is a consulting session. There’s no mention of a full day, this is only implied by the total value of the whole package.

Next, this is a limited offer. it’s only available to the first 100 people and they must sign up right now! Scarcity is a huge driver for sales, especially when people think they’re going to miss out so you must not mislead them.



David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry, advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.