How You Use A Simple Trade-In Strategy To Monopolize Your Market
A trade-in offer is a great strategy to use when you want to create additional value for your business. Have you ever wondered why every car dealer in the country offers a trade-in on the purchase of a new or used vehicle? It's a great way to generate extra sales. Who doesn't love getting paid something for a previous purchase, especially when you can apply those funds toward the new purchase?
But don't think that it's only relevant for auto sales. Literally any business that offers anything new could start using trade-ins as a tool to growing their business. Think about it… why couldn't you trade in old dinner sets, old appliances or possibly old business shirts? All you're basically doing is lowering your margin on the sale of the new item. Most businesses do that anyway by offering a discount. But did you know that any discount that's BELOW 40% does absolutely nothing to compel a prospect to buy what you sell?
And yet, instead of offering a discount of 25% I could offer the exact same amount as a credit on a trade-in of something and the prospect would feel like they were receiving the deal of their life.
Never forget that people love to feel like they're getting a great deal. They like to trade in something old for something new as it can provide a way for your customers to get rid of unwanted goods… and it definitely makes their buying decision easier. A lot of people don't like throwing away things they have paid good money for, so they end up hoarding a lot of old, worn, out-of-date products because they feel a level of pain associated with 'throwing their money away.'
Have you noticed the recent trend in the retail computer market? Many computer retailers are now offering to let you "trade in" your older computer for a newer model. Now they may be able to sell your older trade in for cash, but they won't get much for it. They simply treat it as if they were offering their standard discount and credit you with the exact same amount. The fact is that it stimulates purchases and increases revenue, plain and simple.
When customer's feel that they're getting something in return… such as 10% off or a $100 refund - it can help them justify the decision to buy a new product as they no longer see the trade-in as a waste. Now they're getting something for their previous purchase.
Another great way to boost trade-in sales is by offering to donate all traded-in goods to a needy charity. People now feel they're winning twice - they're being paid a trade-in on their older product… and they can now justify doing so since they're helping out a charity as well.
Perhaps you can run a promotion stating that "all traded-in items will be donated to charity" and secure a write-up in your local paper. Notify your TV, cable and radio stations as well. Many of them love to promote these types of community services and will do so cost free. Besides, advertorials are far better than paid advertising as your offer will reach more people… you will generate positive word-of-mouth… and everyone becomes a winner in this transaction.
One final consideration if you donate trade-ins to charity. In many countries, you can write off the value of a charitable donation against your income. This can then be factored in to your net profit when calculating your ROI on this strategy. Be sure you check with your legal counsel before claiming this deduction to insure this applies in your situation.