Customer DiscountsA registration season does not pass without hearing about the latest and greatest new discount being used in adult and continuing education programs.  From buy 2 get 1 free to across the board discounts for quantity purchases, the discount formats are almost as varied as the organizations themselves.  But do they work?

Over the years, I have seen numerous programs offering discounts primarily because they always have.  In other words, tradition.  So why offer a discount if the only current measureable result is having less revenue because of the discount than if you had not offered the discount at all? Why offer a discount if it does not meet a legitimate need?

The questions themselves raise more questions.  If a program wants to discover if discounts are successful or not, some information is needed to be able to determine if discounts are successful.

What is the goal in offering a discount?

Discounted fees are often interpreted as being offered to increase enrollment, increase revenue, or both.  This is a valid and common assumption since discounts are used excessively in the retail market just for that reason.  But what if your goals are different?

In the case of senior discounts, the object could be to promote good will in the community.  This is an example where building a stronger relationship with your customers is the desired outcome.  Maybe you offer an early registration discount to provide incentives that help push registrations early.  How about a discount for web based registrations only that help move the registration process away from the office.  Or how about a discount for new customers to help you increase traffic and your customer base?

“Discounted fees are often interpreted as being offered to increase enrollments, increase revenue, or both.  But what if your goals are different?”

What is the baseline?

Once the goal is identified, determining how to measure the objective is crucial.  The objective itself should help you set what metrics are to be used that can demonstrate the success or failure of a discount.  The clearer the objective, the more likely you will easily identify the measurements needed.  The more anecdotal the objective, the more difficult it is find the measurement that bests helps you demonstrate success.

Metrics identified, now it is time to create the baseline.  Your next effort is to gather the figures for these metrics without the discount in place.  It may be possible you have archived data from which to create this baseline.  Without archived data, you will need to set a time period when the discount is not in effect and gather the data for that period.

What effect did the discount have?

After baseline figures are gathered, prepare the timeframe when the discount will go into effect and start gathering the same measurements used during the identification of the baseline.  Depending on the objective, you may find you have to perform this step for a shorter or longer period of time.  For example, early registration discounts have a finite time period, so setting the length of the time to gather the data is easily identified.  If building a stronger relationship with the community is the objective, the time frame could be several years and possibly even a perpetual process such as we often see with customer satisfaction surveys.

Now compare your new figures with your baseline.  Does your discount fulfill the objective desired?  If yes, continue to fine tune your discount plan to improve what you have already started.  If the objective was not met, find another way to meet that objective and consider dropping the discount.  In either case, now you have evidence to back up whatever choice is made when offering discounts and the effect it can have on adult and continuing education revenue.

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Author Rick J. Stern

Entrepreneur Rick Stern built Xenegrade Corp with a focus on service to educational organizations. With an MBA from Simon School of Business at the University of Rochester and over 20 years continuing education management, his experience provides valuable insight into the needs, demands, and trends of the continuing education market.

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