I was in a leather shop in Florence a little over a week ago. Soon after one of the salespeople discovered that I was a recent graduate (and therefore didn’t have much money) he leaned in, and as if sharing a little secret between us said, “Well, I’ll tell you what, I can give you anything in here for half off…”
Knowing the store was still making a healthy profit after that “deep” discount, I got to thinking about how marked up everything must be. Not just in this leather store in Italy, but everywhere.
I recently saw a coupon for $50 off a membership at a local pool club. If they can offer that much money off and still make money on the membership, then just how much profit are they making without the sale? Seems like a little much to me.
The knee-jerk reaction to a great sale is “Wow! What a good deal…” but the more you think about it, the more the reaction turns to “Wow! I’m really getting ripped off normally..”
Is that the kind of message you want to send?
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Matt,
Great post. I’ve seen this many times. Even some stores have based their marketing campaigns around it. I remember Bob’s discount furniture telling me “everyday low prices. we don’t markup like the others.” Sad thing was, he still offered me 20% off my purchase! So, if you’re not marking up like others, what are you doing that you can afford that 20%? it’s not like the furniture business has a long term subscription?!
First of all, thanks. And that’s exactly the kind of thing I’m talking about. Customers realizing they’re getting ripped off is bad for any business, but especially bad for businesses that rely on a high number of repeat purchases.