The Blog
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Discounts are supposed to boost sales, right? So why do they sometimes feel like setting fire to your profits? You slash prices hoping for a flood of customers, but all you get is a trickle. And you’re not alone; most businesses do discounts dead wrong and they’re leaving money on the table. Let’s explore how to get it back using science.
The Problem with Deep Discounts
Ever wonder why those 80% off signs sometimes scream desperation instead of value? A 2018 study by Zike Cao, Kai-Lung Hui, and Hong Xu, published in Information Systems Research analyzed nearly 20,000 daily deals and found something shocking: discounts over 60% can actually backfire. They make people think your product is cheap and not a bargain, causing quality perception to plummet along with your sales.
I once consulted with a software business struggling with slow sales. They were constantly discounting at the end of the quarter, up to 70% off, trying to make their numbers. Yet, the more they discounted, the fewer customers they attracted. Customers were avoiding them, assuming the product wasn’t good or that the company was in financial trouble.
Understanding Customer Psychology
This isn’t just for bargain basement brands. Another study looked at 1.8 million sales on Groupon and found that even small increases past the 55% average discount resulted in decreased sales across the board. For instance, if you’re selling a premium coffee maker for $100, slashing the price down to $40 might seem like a great deal, but it triggers alarm bells in your customer’s mind. They start to think, “What’s wrong with it? Is it a knockoff? Is it defective?” However, at 55% off, that’s $45, and suddenly it feels like a premium product at a steal.
This reminds me of when I started my marketing agency. I thought low prices would attract more customers, so I discounted my services to about $599 a month. Month after month, I was disappointed with the lower quality clients and sales objections from prospects. So I tested a higher price point of $1,500, which worked. I then tried $2,500, and that worked too. I reached $5,000 a month (eventually, $25,000/month), and each time my close rates increased. It was confusing at first, but I learned that by positioning my services as a premium offering, I attracted more and better customers.
The Importance of Pricing Strategy
This taught me a valuable lesson about the psychology of pricing. Before diving into how to test your discounts to maximize revenue, let me share the framework I use. You need a system for testing and scaling all your marketing efforts, including pricing. That’s where my Scale with Science Protocol comes in (available for free at the link below).
Three Stages of Testing
- Directional Testing: This is where we quickly and cheaply eliminate losing discounts. You only need $50 to run this test. Create two ads – one with a dollars-off discount (express as $X off) and one with a percentage-off discount (Y% off). Run them on Facebook or Instagram, targeting your ideal customer. This isn’t about making sales; it’s about measuring which gets clicked on the most.
- Statistical Testing: After identifying the winner from the first phase, you refine that message to turn clicks into conversions. Test various dollar amounts or percentage discounts to find the best return on investment.
- Revenue Testing: Finally, you get to scale your proven winner and optimize for maximum profit. This is where you launch pre-order campaigns or limited-time offers using the discount that works best.
The Right Type of Discount
Research shows that the type of discount matters depending on the price point. For products over $100, customers respond best to a dollar amount off. For example, a $600 laptop with $150 off feels better than 25% off. But for products under $100, percentages are more persuasive; for a $50 sweatshirt, 20% off feels more significant than a $10 discount.
Applying the Framework
You might be wondering how to apply all this to your products or services. Pricing can feel like a black box, but I’ve compiled over 45 research papers on pricing into a simple flowchart, which you can get for free below. This eliminates the guesswork, so no more gut feelings – just proven strategies.
Conclusion
Discounts are a powerful tool, but they’re only one piece of the revenue puzzle. If you’re ready to take your business to the next level, click on the link to download the Scale with Science Protocol and learn how to maximize your pricing strategy. Remember, effective pricing is about understanding your customer’s perception and testing different approaches to find what truly works.
Pouring money into paid ads and getting crickets? You’re not alone. Many business owners waste thousands before figuring out what works. In this guide, I’ll share the simple tweaks that transformed my paid ad campaigns, taking one business from barely breaking even to generating over $2.9 million in profit.
Before we dive into the details, let’s address a common misconception: the bigger your ad budget, the more effective your campaigns will be. This isn’t always true. I’ve seen companies with huge budgets perform worse than those spending a fraction of that amount due to a huge mistake that tanks campaigns before they even get started. Let’s explore what that is and how to fix it.
The Biggest Mistake in Paid Advertising
Most business owners are stuck in the past, treating paid advertising like it’s 2010. But the landscape has changed dramatically. Video has taken over, dominating over 80% of all internet traffic. If you’re not using video ads, you’re leaving money on the table. However, there’s a catch: many people misunderstand how to use video ads effectively.
It’s not about production quality or having the perfect script. In our tests, simple videos shot on phones often outperformed expensive, professionally produced content. The key is in how you present these videos. Think about how you use social media—most people hold their phones vertically. Yet, many businesses are still running horizontal or square ads, which costs them dearly.
A 2021 study published in the Journal of Interactive Marketing showed that vertical video ads had a 57% view completion rate compared to just 43% for horizontal ads. Even better, vertical ads had a 10% higher engagement rate. Why? Because vertical video creates a frictionless experience; it’s the natural way people hold their phones. No matter your business type, using video will make a significant difference.
Steps to Create Successful Paid Ad Campaigns
Now that you understand the importance of vertical video, let’s go through a step-by-step process to create paid ad campaigns that convert.
Step 1: Directional Testing
More ideas will fail than succeed. Accept that. Your first step is to spend just $50 on what I call a directional test. This helps you eliminate the losers quickly. If you’re just starting out, test different ad ideas and hooks in your videos. The Scale with Science protocol will help you track what works and what doesn’t, allowing you to pick winners without wasting too much money.
In my last business, I used this strategy to turn $500 in spend into $2.9 million in sales by avoiding ads that would never convert. Wouldn’t you want to eliminate ineffective strategies before investing heavily?
Step 2: Statistical Testing
After identifying potential winners, refine them by testing different variations. For video ads, run three to five variations that performed well in the directional test against each other to see which produces the most revenue. You might not make money during directional testing, but as you transition to statistical testing, you should start seeing positive results.
This stage is critical because it shows what resonates with your audience and which ads convert best into revenue. Remember, you can grab a free copy of the Scale with Science diagram to help with this process.
Step 3: Revenue Testing
Once you’ve identified the best-performing ads, it’s time to scale. By filtering out ineffective ads through the first two steps, you can focus on those that drive revenue. Businesses that scale the fastest aren’t necessarily those with the biggest budgets; they are the ones that test the most variations quickly.
One of my clients tested 400 variations in a month while their competitors were still perfecting their first video. My businesses test thousands of ad variations, which keeps us ahead of rising ad costs and poor performance.
Final Step: Elevate and Scale
Once you have a winning ad, don’t stop testing. Keep refining and exploring new concepts. This iterative process helps you stay ahead of the curve.
Make sure to download your free copy of the Scale with Science protocol to assist you on this journey.
Want the full strategy? Join my Free 7-day Mini-Masterclass to learn how to grow your company faster … and with total confidence.
Tired of wasting money on marketing that just doesn’t work? You could be doubling your sales but you’re probably making this one critical mistake.
The secret weapon is scientific testing. In this article, you’ll get five tips to double your sales in under a year. I’ve used this method to scale multiple businesses to millions of dollars.
We’re going to ditch the guesswork, embrace the science, and I’ll even give you a free tool to make it all easy.
Understanding the Power of Continuous Testing
A study by Koning, Hasan, and Chatterji in Management Science (September 2022) showed that continuous testing can boost customer visits to your website by 10% within just a few months. This compounds to a 30% to 100% jump after a year. That’s doubling your prospects just by testing using the scientific method.
I launched an e-commerce business with just $500 in tests over four months, and I scaled it to over $2.9 million in profit (and still counting).
This is how you do it: small directional tests that are fast and cheap.
The Common Mistakes in Testing
Most businesses do testing wrong. They change too many things at once, spend too much money, and wait too long. Here’s the right way to approach it with five essential tips:
1. The One Thing Rule
Test one thing at a time. This is known as isolating variables in science. It means to test one thing on each test – maybe it’s the headline, the color of a button, or the picture on a webpage. Pick one (and make it one that counts – something that can move the needle). Don’t change everything at once. If you do, your tests will either take too long, cost too much, or won’t provide useful information.
2. Directional Tests
This is my secret weapon. A directional test is a small tweak with a small budget that gives a big impact. Use my free Sell More with Science flowchart to pinpoint exactly where your business stands, whether you’re a startup or looking to scale. For instance, a quick $50 directional test based on that chart can tell you if your credibility messaging resonates. In under 24 hours, you’ll know if it’s a winner or a dud. No more wasting ad spend.
(image below – full download can be found here)
3. Don’t Get Fooled
Don’t bail on a test too early. Directional tests are great for eliminating duds, but for promising ideas, you need statistical significance. This means making sure your test runs long enough to give you reliable data.
4. Profit From Failure
As Thomas Edison famously said, “I’ve not failed, I’ve just found 10,000 ways that don’t work.” Negative testing is about actively seeking failure quickly. Each time you test something—a bad headline, a rejected offer, or an ignored image—you get closer to what works. It’s about eliminating all the things that are wrong and focusing on what truly works. You’ll generate more cash by quickly eliminating ineffective options.
5. Assume You Know Nothing
Test everything. You think you know your customer? Test it. You think you know what they want? Test it. Assume you know nothing because until you test, you don’t know. In one of my businesses, we actually place bets on every test to see which headline or offer will win. Guess what? We’re almost always wrong. Testing is the key to unlocking true customer insights.
Conclusion
No more guessing. No more dart throwing. You have control and predictable growth. It’s not luck; it’s science. This approach works for every area of your business.
Next Steps
Want to dive deeper? Download my free resource: Sell More with Science. You can also explore my Scale with Science Mini-Masterclass for more insights.
Let’s keep the conversation going! Connect with me on Twitter and Instagram.
Could you be missing out on a 24% increase in sales by not focusing on your online reviews? Let’s explore how to take control of your reviews and turn them into a powerful sales weapon using science. I’m going to give you a tool so you can do it NOW.
The Impact of Reviews
A 2021 study in the Journal of Marketing Science found that a single negative first review can tank your average rating by 0.29 stars and cost you nearly 40 reviews over the next year. AND … if that one bad review is the first one shown, it can poison the well for months to come. However, if you get those first reviews right, you’re setting yourself up for a wave of positive feedback since customers often base their reviews on earlier reviews.
Step 1: Respond to Every Review
Here’s the first step to fixing this: respond to every single review, good or bad. Research by Proserpio and Zervas published in the Journal of Marketing Research found that responding to reviews boosts star ratings and can increase the total reviews by 12%. It can also bump you up half a star within six months. Why? It shows that you care, you’re listening, and this builds brand value over time.
Now, before I give you the how-to, I’ve created a free mini masterclass on scaling with science, packed with tactics you can use today. Just click here to get it for free: Free 7-day mini-masterclass
Handling Negative Reviews
We all get negative reviews from time to time. Research from Bocconi University and INSEAD in 2023 showed that a single negative review on the first page of your webpage can decrease purchases by 42%. Each additional negative review drops that by another 27%. This effect is strongest for reviews about product or service functionality. But remember, negative reviews aren’t all bad. They give you a chance to publicly demonstrate how you handle problems and can turn dissatisfied customers into brand advocates by responding to them.
Step 2: Review Order Matters
Next up is review order. Research from Tuck and the London Business Schools highlights something called the primacy effect. A bad first review is incredibly damaging, but a relevant positive first review is a massive plus. Check how your website or product listing sorts reviews. If they are sorted by date, fix that – and feature a compelling, detailed positive review as the first one that people see. This can increase your sales by up to 20% (!).
Testing Your Changes
How do you test if all this is working for your business? It’s simple: use the scientific method. Ask the right questions and let the data guide you. I’ve got a tool called Sell More with Science that you can use to pick exactly the right test to run.
For your on-site reviews, create two versions of the product page: one with your current review set and one with the optimized reviews. Run a simple A/B test showing different people different versions of each page and see which gets a better response. Use any standard page tracking software to track how far people scroll down, how much time they spend on the page, and how many add-to-cart clicks you get (more details in the free resource download above). You’ll find that by changing the review order, it probably makes a huge difference!
What if you have a product on a third-party site? This testing can take a little longer but it’s worth it. First, track how many leads come in from each review site or how many sales you’re getting. This gives you a baseline. The next step is to actively manage the reviews—respond to them and address negative reviews both publicly and privately. After a month or two, check for an increase in leads or sales for those sites.
Real Results
I’ve worked with a services company to lift revenues by 24% without spending a dime on new advertising. Product companies have seen even bigger increases—all by focusing on working scientifically to sell more. Make sure you use the Sell More with Science chart to guide you: if you want the full roadmap to scale your business scientifically, click here to see how I built a $2.9 million business from just $500 in tests using the scientific method.
Low email open rates are frustrating. You’re leaving money on the table, and I’ve been there. You think you know how to fix it by simply adding the recipient’s name in the subject line, right? A research study from 2018 convinced many of us that this was the way to go … but that’s where everything went wrong.
Researchers published a paper titled Personalization in Email Marketing: The Role of Non-Informative Advertising Content, and it got everyone thinking that putting a name in the subject line was a magic bullet. I’m here to explain why that study is outdated and what to do instead.
The Problem with Personalization
The idea behind personalization in a subject line is that it grabs attention, leading to higher open rates. People like seeing their name, so marketers jumped on this bandwagon. Most stopped there, thinking they just needed to find the right tactic to succeed.
But business isn’t about finding one magic bullet; it’s about having a repeatable process. Like the one I use to run $50 experiments that uncover how to scale (more on that in a bit).
When we look at the research that discredits the original study, it becomes clear that relying solely on a name in your subject line won’t make you money.
Testing Subject Lines
Your subject line is the first impression for your email. You might think personalization would be effective—people see their name, so open rates should rise. But if open rates are low, let’s fix that. Here’s a small test:
- Split your email list into three groups and send each group a different subject line.
- The content of the email remains the same, but the subject lines vary.
- First: No name, just a subject line.
- Second: Use their first name only.
- Third: Use their first and last name.
Measure which one gets opened the most. Remember, every email audience is different. If you blindly follow what others say, you’re just guessing.
Recent Research Findings
Recent research from 2023 published in the Journal of Marketing Research showed that putting names in subject lines isn’t working any more. Why? Because everyone is doing it – and now, a name in the subject line is just noise.
This is why blind imitation can be dangerous. Just because it worked for someone else doesn’t mean it will work for you or in the current landscape.
Specific Personalization
While generic personalization is dead, there’s a way to make it work. You need to be specific. Here’s how:
Consider your customer journey—what are their pain points? What truly matters to them? For example, instead of saying, “Raj, check out our new product,” try “Raj, struggling with Facebook ads? This might help.” This adds a layer of specificity that makes it relevant to the situation.
Continuous Improvement
Keep at it. Take the winning subject line from your first test and run another test with a new variation. Maintain what works and discard what doesn’t. You’ll find yourself improving incrementally over time.
A little improvement compounded can double, triple, or even quadruple your open rates. Your email subject line is just one lever to increase revenue, but it can feel overwhelming. Don’t try to tackle everything at once.
Conclusion
In the next discussion, I’ll share my framework for applying the scientific method to any part of your business. Remember, it’s about the process, not just a single tactic. If you want a shortcut, get my FREE Scale with Science Mini-Masterclass.
Elon Musk is running seven companies and growing them at an incredible pace. Then there’s a lot if us… feeling stagnant in business- BUT there’s a process inspired by Musk’s methods that can help you improve every single year. This process can make your business 37 times better in just one year. Here’s how:
The Power of Compounding
Compounding is a powerful concept. If you improve by just 1% every day, your business, yourself, and your life will be 37.78 times better in one year. BUT, if you get 1% worse every day, you could end up at a mere 0.03 (business dies). The truth is, many days we fluctuate between being fine, worse, or better. The key is to be intentional about getting better every day.
Introducing the Process
This process is simple yet effective, and it’s used by military leaders and top CEOs to ensure continuous improvement. It consists of three steps:
- Pre-action review
- During action process
- After action review
Step 1: Pre-Action Review
Before starting any initiative, conduct a pre-action review. This step sets the stage for success. Here’s how to do it:
- Set Clear Expectations: Define the outcomes you want to achieve.
- Identify Obstacles: Anticipate what might get in your way.
- Determine Resources: Know what resources you have available.
- Define Success Metrics: Establish objective measures of success.
- Outline Ongoing Metrics: Decide how you’ll measure success after completion.
For example, when SpaceX prepares for a Falcon 9 launch, they define their desired outcomes, list potential obstacles, and outline the resources available.
Step 2: During Action Process
While executing your plan, focus on three key areas:
- Observation Points: Track what’s working and what isn’t.
- Communication: Ensure clear communication among team members and stakeholders.
- Measurement and Logging: Keep track of data and metrics to inform future actions.
Even during the action, it’s normal to make mistakes. The important part is to learn from them and improve for the next time.
Step 3: After Action Review
After completing a project, conduct an after-action review to reflect and improve. Focus on:
- Outcome vs. Goal: Compare the actual outcomes with your initial goals.
- Successes: Celebrate what went well and recognize your team’s efforts.
- Areas for Improvement: Identify what could have been done better.
- Metric Review: Ensure you have the right metrics and data to inform your next steps.
For instance, if a Falcon 9 launch doesn’t go as planned, SpaceX uses the data gathered to improve their processes and avoid similar issues in the future.
What To Do Next
This three-step process may seem simple, but it’s how you can achieve continuous improvement. Commit to repeating these steps regularly, and you can expect significant growth over time. If you want to explore how to apply scientific methods to scale your business, check out more resources on my website.
For further learning, grab a copy of my book, The Business Unlock, which dives deeper into these concepts. You can also find more resources and training on the CEO Workbench.
What if you could increase your sales by up to 270% – without changing anything in your sales process, your sales presentation, or the number of leads you’re getting? The key is in how you use your testimonials and reviews.
I’ve been doing this for over 10 years, and it has completely transformed my sales. Here’s how I do it:
Let’s get started with effective reviews and testimonials. The mindset a prospective customer comes to you with makes a HUGE difference: between facing objections, or meeting a pre-sold prospect who’s ready to buy.
Online Reviews Matter
If you’re online, this is a no-brainer. But even if you mostly operate offline, online reviews absolutely matter. Here are some compelling statistics:
- 93% of consumers say online reviews impact their purchasing decisions.
- Products with five reviews are 270% more likely to be purchased than those with zero reviews.
- Customers are willing to spend 31% more on a business with excellent reviews.
- 72% of consumers say positive reviews make them trust a local business more.
- A one-star increase in Yelp ratings can lead to a 5 to 9% increase in business revenue.
- 94% of consumers say a negative review has convinced them to avoid a business.
- Businesses with nine or more current reviews earn 52% more revenue than average.
These statistics highlight why I focus heavily on getting reviews, publishing them, and keeping them current.
Platforms for Collecting Reviews
There are several popular platforms for collecting reviews (depending on your industry, you might have specific industry review sites such as medical or legal): Google, Facebook, Yelp, etc. Sites like Glassdoor provide insights from employees, which can also influence customer perceptions.
Strategies for Collecting Online Reviews
Most customers conduct research online before making a purchase. To effectively collect reviews, consider the following:
1. Timing Your Requests
When requesting reviews, timing is key. You want to ask your customers for reviews at the right moment, ideally at turning points in their customer experience timeline. This could be when they transition from a prospect to a new customer or right after they’ve received a product or service.
2. Make the Review Process Easy
Don’t just wait for customers to leave reviews; actively prompt them at various points on their experience timeline. If you wait passively, you’ll receive way fewer reviews. Instead, encourage them to share their experiences actively.
3. Respond to Existing Reviews
It’s also a ‘must’ to respond to existing reviews. If you have positive reviews, frame them nicely and use them in your marketing. Highlighting these reviews can reinforce potential customers’ decisions to choose your service or product.
Handling Negative Feedback
Negative feedback is inevitable, but how you respond can make all the difference. Addressing negative reviews promptly shows potential customers that you care (and the benefits are actually backed by research). If someone leaves a one-star review, respond thoughtfully – and quickly – to demonstrate your commitment to customer service. This can improve your overall perception and show that you are attentive to customer concerns.
Leveraging Reviews in Marketing
Leverage reviews in marketing. For example, post reviews on your social media, incorporate them into your marketing collateral, and place them on sales pages where customers are taking action. Utilizing the right reviews at the right time can significantly increase conversions.
My Review Flow
In my e-commerce business, I capitalize on the excitement of customers who have just made a purchase. On the thank-you page, I ask for a review before they even receive the product. This works because their excitement is at its peak right after the purchase.
To maximize reviews across platforms, I rotate links to different review sites like Google and Facebook on the “thank you” page. This strategy ensures I gather reviews from various platforms without overwhelming any single site.
Understanding Testimonials
Testimonials are similar to reviews but allow for more direction. They are often used in case studies or presentations and should be crafted to overcome objections that potential customers may have. The purpose of a testimonial is to address concerns that arise during the sales process.
Collecting Testimonials
When collecting testimonials, consider the following:
- Identify the main concerns customers had before buying from you.
- Ask about their experience during the delivery of your service or product.
- Gather feedback on how your communication style made them feel.
- Inquire who else would benefit from your product or service.
- Capture their thoughts on whether they would choose to work with you again.
Creating Trust with Testimonials
Having no testimonials is not an option. They create trust and establish credibility. Ensure that testimonials are grouped by relevant aspects of your business, making it easy for potential customers to see themselves in the success stories of others.
What To Do Next
Implementing an effective strategy for gathering and utilizing testimonials and reviews can drastically improve your sales process. Start today by asking for reviews, responding to feedback, and showcasing testimonials. You’ll be amazed at how these simple changes can lead to a significant increase in your sales.
For more insights on using the scientific method to scale your business, check out [CEO Workbench](https://link.rajjha.com/YT-free) and other resources linked below.
Sick of being on the revenue rollercoaster?
$50,000 one month.
$87,000 the next.
Then back down to $42,000.
That was my reality my our old firm: revenue all over the place
It was chaos
But then, I had a crazy idea
What if we did something unheard of? This was a law firm. What did law firms NEVER do?
A subscription model
We flipped the script and offered clients a fixed monthly fee
REGARDLESS of how much work they sent us
Yes, we’d do unlimited work for a fixed fee
(people thought we were nuts)
But guess what?
It worked
Like, really worked
(no, we didn’t get crushed with work, because of how we priced)
But here’s where it gets really exciting…
We started with clients paying an average $2,000 – $3,000 monthly.
Flipping over to subscription, over the next two years we took our average to $11,000 – $19,000 monthly retainers
This wasn’t just a billing change
It was a business transformation
We became predictable
The lesson:
Don’t be afraid to break industry norms
Test crazy ideas
The biggest opportunities lie where others fear to tread