Selling With A Rebate? What's Your Value?

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The number of companies that sell products that come with a government rebate that don't offer any compelling value beyond the rebate astounds me.

A subsidy is the market's greatest key average - everyone can offer it.   So why insist on using an average like this as the basis for a marketing message?

If like most of your customers, you believe that you get what you pay for, then a product that is essentially free must have a low perceived value.

At the first few months of a subsidy being introduced the strategy and thinking many companies employ is 'first in, first served'.  The government or council will basically market the product for them as they want to use the opportunity to strengthen their approval ratings.   All the supplying company needs to do in this time is ride the PR wave and get in front of as many people as possible. 

In these first few months it's a numbers game where there's lot's of 'low hanging fruit' to be picked.  Cold calls and door knocking will all bring a reasonable amount of orders if you're persistent and wide-spread enough.

However, If they haven't bothered to substantiate and communicate their difference and value during the early stages, coupled with a market that is continually shrinking as subsidies usually only allow for one purchase per person or per home, closing sales will become increasingly difficult.

Doesn't price play a vital role in marketing and if so, isn't a rebate a huge advantage?

Price does have a vital role in marketing as it can help to differentiate you either by having a higher price coupled with higher perceived value, or being price competitive and offering a product that satisfies customers needs and nothing more. 

The Problem:

The failure of businesses that jump on the subsidy bandwagon is that they fail to use the opportunity to build credible and sustainable value that has the potential to outlive the life of the subsidy.  I'm sure many people intend to kick-start their business by using a rebate to help fast-track their reputation.

However, if all you can offer in your marketing message is a rebate and you cannot provide a compelling reason on top of this for people to contact you, then be prepared to be overrun by a competitor who has thought ahead and offered compelling value.

What You Can Do:

Before you spend a cent on advertising, have a think about your long term objectives.  If you plan on staying in the market after the rebate ends, then you need to ensure your marketing is focused on building your position and reputation.  Strong market positions are rarely created within a few weeks, so think about how you're going to differentiate.

For example, can you offer better warranties or guarantees or do you have certified quality assurances? Are you able to deliver within a short time frame?  Think about intangible qualities that are hard to copy such as having a sales approach that isn't pushy and having sales staff that are highly knowledgeable of the product or service. 

Can you offer free advice through your website?  More and more people shop around online before they make a call, so you need to offer information here that clearly differentiates you.

Testimonials may seem old fashioned but they're still a highly effective sales tool.  Gathering testimonials is not just a good marketing practice, it will show you how people think about your company.  Use this information to further refine and strengthen your message.

Sell your real value and difference first, then make it even more compelling by offering the rebate.  If you can get above your market averages such as a rebate, you'll stand a much greater chance of securing orders.

Competing with a rebate is not the same as competing on price because the rebate is a key market average.  To survive in a subsidised market you not only need to reach a large number of prospective customers, you need to sell value.

Find value that is genuine and is not easy to copy.  It will give you a much higher return from your marketing.  

Don't waste any time, the longer you leave it the less chance you have of survival.

© Hamish Chadwick, Image Substation 2009

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