Tuesday, February 26, 2013

Do Your Discounts Change Behavior?

(1:06) Isn't the point of a discount to change behavior? Whether it's an early bird special to bring in diners when tables are empty or travel discounts during off-peak times, businesses use incentives to attract customers when business is slow.

(0:59) Wikipedia defines an incentive program as "a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time."

(0:53) You may think that this seems obvious, right? And yet, few marinas actually accomplish this. Instead, they rush to offer across-the-board discounts to almost any boating group that requests one. Fed-up with all of these discounts, some marinas now refuse to provide any incentives. Both of these behaviors are a detriment to your business.

(0:45) Carefully planned, executed, and measured incentive programs can add to your bottom line, bring in new and returning customers, and help you stand out. The key is picking an incentive that will actually modify behavior and then timing it so that it adds to, rather than subtracts from, your business.

(0:38) Think about the typical discounts available today. A boater simply claims, or occasionally must show, that they are a member of one of many boating organizations and they receive about a 10% discount off the transient rate.

(0:32) First, these discounts have become so common that they are no longer discounts but simply the new price you are charging. Then you usually must offer these discounts on your busiest weekend as well as on your slowest days. And because of the two previous problems the discounts are so watered down that they no longer truly change behavior. I've been at marina check-in desks where a boater walks into the office to pay and then asks, "Do you have XYZ discount?" Let's face it, they were coming to the marina already. The discount failed to do its job.

(0:16) Given the variety of factors that go into selecting a transient stop, is 10% enough to modify my behavior or simply something I will ask for when I'm going there anyway?

(0:10) I believe there's a better way. A way to focus your discounts to gain maximum impact and have an actual positive effect on your business. It may take more time, more thought, and more planning, but it will also be more rewarding.

(0:02) And that's the marina minute.