There are SOOO many companies that depend on Black Friday sales for their company to survive. If it works out well, they survive for a while longer but if it’s a bust, they close up shop.

The truth is that most of them don’t profit at all. They sell things at less than their own cost and they spend tens of thousands of dollars in advertising because they need to get customers in the door. It generally leads to disaster.

It reminds me a lot of Groupon and the mess that this creates. Let’s say you own a dry-cleaners so you offer a Groupon to have shirts pressed for 75 cents. Yes, you will get some customers in your store. And your hope is that they’ll be so impressed that they’ll come back every single month right? We call that offer a “loss leader” because you get a chance to create a relationship with the prospect.

The problem though, is these people are PRICE shoppers, not loyalty shoppers and not value shoppers. I can assure you it’s not the first time they’ve ever had something dry cleaned in their life so they are cheating on another company to come take advantage of this offer. And next month, they’ll go to the one with the 60-cent shirt offer. This is why Groupon doesn’t work for business. It works for gross income, but there’s no net. Especially when factoring in advertising costs and the high maintenance costs of prospects like that to begin with.

It’s a business model that simply doesn’t work because you are attracting the wrong type of customers. The same is true for those looking for discounted TV’s or discounted real estate agents. They don’t see VALUE, they only see CHEAPER. Meanwhile, you have others that wouldn’t be caught dead in a WalMart or waking up at 5am to stand in line outdoors during the Winter to save $30 on a television.

You want to attract customers that are more willing to pay for a better VALUE for their money, even if it costs more. When you give a presentation for all of the great things you offer, the truth is that they CAN’T get it anywhere else at ANY price so they either see value in it or they don’t. If they don’t it’s because you didn’t teach them. No need for sales or discounts. Provide a better product and presentation!

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