Grow Your Business

We offered our first discount in 8 years. It didn’t go well.

In December, we did something extremely unusual for our business: We ran a discount.

And the result was … a total flop.

In fact, here’s an actual chat from the moment we sent the email out:

Screen Shot 2018 01 19 at 9.47.48 AM

I’ve been publicly against discounting for a long time.

In general, discounts are a lazy way to convert customers to buy. Most marketers lead with price, discounting by 25%, 40%, even 50%, watching a surge of orders come in, and assuming they’ll sell those customers more on the back-end.

What they don’t realize is that those discount customers will hardly ever convert to full-price buyers. These discount customers generate a disproportionate number of refund requests and dramatically cut into profit.

These businesses are now in the discount spiral of creating more and more discounts for the same result. They stop innovating and creating truly must-have products, instead leaning on the convenient crutch of discounts. Over time, frequent discounters like Gap train their customers to wait for the next sale.

It’s the rare company that holds the line on pricing, creates incredible products, and charges a fair price to customers who are delighted to pay. This is what we did in our business for years and years.

So why did we try a discount?

And why did it fail?

Why we ran a discount for the first time in 8 years

We’re always looking at our business and testing our assumptions. Here are a few core assumptions we’ve tested:

  • People won’t pay for content online (they do — our top 1,000 customers spent more than $8 million with us)
  • People won’t read long pages (our top sales page is more than 75 pages long)
  • You need to leverage social media to sell (well, this might be true … but my social media doesn’t sell much of anything)

We want to balance our core values — which don’t change — with testing different tactics to reach our market. Those tactics change over time. As Marshall Goldsmith says, “What got you here won’t get you there.”

So when we took a holistic look at our business, paying special attention to the hundreds of thousands of readers who have never purchased anything from us … we noticed that “price” was one of the major objections.

If you had a group of hundreds of thousands of loyal readers who’d never bought from you, and their primary reason was “price,” what would you do?

We thought about this carefully.

  1. We knew that we had a large segment of readers who had never bought from us and that “price” was a major barrier for them.
  2. We knew that when a customer buys from us once, they tend to love our material and buy from us again. The key was getting them to buy for the first time.
  3. Therefore, we concluded that if price was a concern — and we could remove that barrier — we might build a group of long-term customers who otherwise would not purchase from us.

Hence the idea of a one-time discount.

We also studied a wide variety of other companies that discount, including discounting a can of soda cheaper when it’s cold outside, the SaaS product that uses discounts to encourage yearly payments, and premium brands that use “whisper sales.”

We decided to make a bet and try a one-time promotion offering special pricing for select courses.

How we rolled out our special pricing campaign to 120,000 people

Here was our plan:

Step one: Send an email to a small cohort with a subtle promotion. Watch reactions.
Step two: Depending on reactions from the test cohort, we could continue by sending to a larger cohort.
Step three: Send a second, shorter email that more directly mentioned the promotion to everyone. Sales would close that night.

We had two rules:

  1. No leading with price. We would not create a gaudy $9.99 $3.99 pricing page.
  2. We would limit the promotion to a few select courses.

Our goal here was “tip” prospects who were on the fence about trying one of our courses, knowing that our product quality and customer service teams would convert them into long-term customers.

There were a few possible outcomes we were prepared for:

  • Our readers revolt and feel slighted that we offered discounts after years of discouraging them. And what would the people who have already paid full price think?
  • It blows up and we convert a massive crop of students who wouldn’t have normally signed up.
  • It’s middle of the road, with a few folks signing up and little impact to our bottom line or brand.

After agreeing on the approach, we set aside a week on our calendar and hoped for the best.

Here’s what email one looked like:

Notice that the email led with value. 2/3 of the way down, we introduced the special promotion. There was no mention of it in the subject line. This was all intentional.

We took great pains in writing this email, drafting several versions with multiple edits before settling here.

When you clicked, the page linked here:

This page featured short snippets of the selected products. Each button highlighted the savings (“Save $500”). In retrospect, we should have spent more time describing the products. It may have helped to include prices of the products.

Remember: we wanted to send to a tiny subset of people first to avoid totally misreading the situation and angering our readers. So we sent to a VERY small group of 2.6k. And then, this happened:

First cohort (2,600 people):

IWT Email 2 1

What you’re seeing is a 32% open rate and a 1.6% clickthrough rate. These are relatively normal numbers for us. And most importantly, we didn’t get any negative reactions about offering a discount.


There were no responses either. There were also no sales. This may have been a sign no one cared. Or that we sent it to too few people. We weren’t sure.

So, per our plan, we sent to more people (but not EVERYONE ELSE) later in the day.

Second cohort (30,000 people):

IWT Email 4

All of these numbers are fairly standard. In other words, people were getting the email, reading it, and some were clicking. We got similar responses — in other words, no emails back (positive or negative).

And also…

No one was buying.

No response. No sales, no email replies … nothing. It was like we were shouting into a dark void.

Screen Shot 2018 01 19 at 10.00.15 AM

You would expect something. Maybe angry emails. Maybe people saying “FINALLY! I’ve been waiting!” But to get nothing at all?


In fact some of the only reactions we received were readers (rightly) wondering why we were going back on one of our own rules.

Screen Shot 2018 01 19 at 9.52.27 AM

It was time to make a call. We’d seen barely any email responses and fewer than 10 sales. We decided to send to the rest of our segment and watch the reactions overnight.

Third cohort (86,000 people):

IWT Email 3

And the result was the same as the previous two cohorts: nothing.

Everything was technically working. The sales forms worked. Clicks were being tracked.

Eventually, we started to see a few sales. But no questions about the promotion or the courses. It was like we threw a party and nobody came.

Here’s my question for you: If you were in this situation, what would you do? Here’s the scenario:

  • You just emailed your entire segment with a sale offer, but you’ve gotten poor response: A few sales, no reply emails.
  • You’ve doubled-checked your technology and everything is working correctly.
  • You have a second email scheduled for tomorrow.

What would you do?

We huddled and decided we should do something uncharacteristic for us. We quit. We cut our losses and didn’t even send the second email.

MA = marketing automation team. EOY = end of year. SOD = start of day.
Ryan is ordering that the second promotional email be cut.

We decided to reconvene in the morning. Maybe people would read it and buy later. Maybe people were at work and wanted to get home before buying. At this point, WHO THE HELL KNEW? Certainly not me.

My fiancée noticed I was walking around aimlessly with a blank look on my face. “What’s going on?” she asked. I told her. (She used to be a retail buyer for 8+ years.)

Her response:

“Oh, boohoo … you run a business where your customers don’t love discounts and only want to pay full price. What a tough life!”


I woke up the next morning and asked my team for the numbers. What did weeks of planning, lots of rewrites, and endless wrangling over the positioning get us?


Now $42,000 is real money to a solopreneur or small team. But when you factor in our opportunity cost — all the hours of brainstorming, copywriting, design, and testing, plus what we could have done with other marketing strategies — this was a loss.

What we learned

There are lots of possibilities for why this didn’t work. In descending order:

  • The promotion wasn’t big enough (10% off doesn’t motivate as much as 50% off)
  • The promotion wasn’t clear enough (it was buried at the bottom of the text of one email, obscured by a subject line of “I’m glad my teachers taught me this”)
  • The timing was off (after Christmas, typical retail logic = people have spent their money)
  • Our prospects/customers aren’t motivated by price or 10% promotions … or non-buyers claim price is a barrier but it’s really not (this one has a lot of possibilities and you should carefully think about this)
  • A combination of the above
  • Something totally different we didn’t even consider

Here’s the part of a GrowthLab post where we usually tie it up with a bow with lots of takeaways. But the ugly truth here is that business is messy. It’s not always entirely clear why something works or doesn’t work. And sometimes “test your assumptions” means those tests will fail. I wish I could point to one of those bullets as THE reason. But I can’t.

What’s even more confusing is that this is a strategy that can’t really be A/B tested. As I previously wrote on a Quora post about A/B tests:

You generally can’t A/B test strategy.

With really major changes like offering a new product or which product to offer — changes that can potentially provide HUGE ROI or cost you a lot — you can educate yourself with customer research, etc, but ultimately you have take a risk and make a decision.

Will we run a promotion again? I don’t know. If we do, we’ll take a fresh approach and build from the ground up.

The bigger lesson is that after 14 years of running this business, I still have a lot to learn. As your business gets more complex, there are more and more choices to make — and fewer and fewer exact formulas to follow.

I love my team’s willingness to experiment with new approaches, even radically new ones. And we’ll continue sharing our lessons learned — from shutting down a $2 million subscription product, how 1,000 customers make us $8.6 million in revenue, to why it’s important to rewrite your story — here at GrowthLab.

While I can’t pick out one of those bullet points as a lesson for our business, I do know my personal lesson: Even after 14 years of doing this, I still have a ton to learn. In fact, we all have a ton to learn, all the time. Despite what dozens of blog posts will tell you, sometimes there’s no way to know the exact reason something worked or didn’t work. There’s no fool-proof system.

Those messy truths are the kinds of things we love to write about here on GrowthLab — and I’m glad you’re along for the ride.

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There Are 19 Comments

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Hi Ramit,

I was in this list. I had wondered why you were offering a discount, but it didn’t factor in my decision not to buy.

It was actually because I had bought another course a few months before that, and was still making my way through that one. I wanted to give that course my full attention. So for me, the timing was off.

That doesn’t explain the mass drop-off, though. Sorry your campaign didn’t go as planned! I appreciate seeing posts like this because it lets me know even heavy hitters don’t get it right every time.

I love Endless Audience! I’m not building an information product at the moment (digging in to the course actually helped me realize I needed to pivot to a freelance/coaching model), but it helped me put my priorities in order when considering what to focus on when building a business. It continues to be a great reference point for me when I feel “stuck” and don’t know where to turn.

Hey Ramit

So glad you posted this article.

I got this email at the time and very nearly sent you an email back asking why you were discounting. I think I resisted typing at the time because it would seem strange for a potential customer to feel almost angry that you were giving money off.

I think the weird feeling I had was because you’d taught for ages NEVER to discount, and then you were doing the same. Was a bit fraud like… made me question does Ramit really have principles when you create loads of free content to create trust.

The best comparison I have is when I didn’t buy a course from doubleyourfreelancing because it seemed strange. Their tag line is “charge what you’re worth” yet they run a email funnel that offers a 33% discount at the end of it!

Anyway, very glad to read this article and see it was all an experiment. I think it’s right to shelve this idea but just a thought – if you did it again, I would have loved it if you had just written honestly in the email and had said straight up that you were testing your long held belief by offering a discount and would see the results.



Ramit Sethi

Thanks Chris. I really appreciate it. And that’s a very interesting idea. The longer I stay in business, the more and more I love when we (and other businesses) are radically transparent.

Hey Ramit

Thanks for the reply.

I’ll add a couple follow-up things I was thinking.

1. Don’t underestimate how much people trust and warm to people that have principled positions – even if they go against the grain. Have you noticed how a lot of principled politicians build a cult like following, like Ron Paul, Jeremy Corbyn etc? It’s because they seem authentic and stand up even when their principles are unpopular. If these people went against their principles they’d be vilified overnight.

2. I wanted to add to why I didn’t buy in the sale (and have still not bought any of your courses despite spending $1200 on one of your ZTL students courses recently).

For me it’s not price, it’s just timing. The time isn’t right yet – I’m focusing on my freelancing and I don’t want to start a business yet. I know that when I do (likely by the end of the year) that I’ll buy ZTL, until then I’ll sit on your list waiting until I’m ready.

3. My question to you – if someone says their reason for not buying is “price” – do you believe them?

I agree with Chris in terms of radical transparency…

It’s one of the things I love about the way that Colin Theriot sells his products in his Facebook group. It’s a different approach to you obviously (he uses a group instead of email marketin), but he’s always really upfront about what he’s offering and why.

Even though I know he’s selling, I literally LOVE reading his sales pitches! (And I purchased his bundle of courses).

My only thought in reading this is that having 10 courses to choose from is overwhelming. Like… which one do I want? I wasn’t part of the cohort, but it would have seemed unusual to be directed to choose from 10, when you normally go to such great lengths to “pre-sell” the value and idea of what you’re promoting before you actually pitch a course.

Either way, I’m glad to see this post.

I’d seen someone else write about the discount, and I’ve been looking forward to the analysis!

Hi Ramit,

I really appreciate you to be so transparent.

In this article you wrote you are not sure why peple did not buy. Back in December, I also red your end-of-year-discount offer.
I could imagine it was because there was no option to pay in monthly rates, I can just remeber the option to pay full.


I wasn’t in the cohort, which is a shame, because I’ve had my eye on “How to talk to Anyone.” Oh well, I’ll get it eventually.
My guess is that a lot of people who complain about price won’t buy even if the discount is 50% or more. There’s a big mental barrier to buying your first course (I remember the panic when I bought FF a few years ago) and even with a big discount it’s hard to shake the idea that you’re “blowing money” on scams (and maybe the discount was doubly discouraging?). I get a steady stream of info product sales in my inbox and there are plenty I would never buy or wouldn’t avail myself of even if they were free. Part of it is the value proposition, and part is the fact that I simply don’t have the time or mental resources to take online courses every week, so I stick to what is most relevant for me.

Ramit Sethi

“My guess is that a lot of people who complain about price won’t buy even if the discount is 50% or more.”

I agree.

I remember seeing this email and wondering why you were discounting. I can’t remember exactly why I didn’t buy then but I do remember the 10% discount not being particularly appealing. I probably needed a good sales email guiding me along.

There were definitely a number of courses I was curious about but at that particular email moment in time, I wasn’t particularly interested. I think that email wasn’t compelling enough to motivate me to purchase. It wasn’t related to the discount, I just didn’t feel a particular urgency for any particular program.

Fascinating analysis. I immediately went to see if I received this email – and I did, but I hadn’t opened it. I had purchased ‘Teach Yourself Anything’ just a few days before, and didn’t open the next four emails after that. I didn’t expect to miss anything major just a week after a brand new course launch.

I agree with the above comments that being more transparent would have induced me to do so, however. Maybe if the email headline had been “I haven’t done this in eight years,” or even, “Happy Holidays, weirdos: here’s a discount.” Given that it was only 10% off, I wouldn’t feel gypped about courses I had already bought.

I also agree that the discount size being comparatively minor probably didn’t do much to convert people who wouldn’t buy at full price. I’ve purchased 5 or 6 non-premium courses over the years, but as much as I’d love to get one of the heavy hitters, I don’t have it in my budget yet to drop four figures at once. I should point out here: I know there is monthly pricing, but I loathe owing money, and I always pay for things in full. My only recurring costs are rent and utilities, and I like it that way. That could definitely be a ‘me’ thing, though, and not a larger trend.

And Cass seems pretty great.

Ramit Sethi

Interesting analysis and I appreciate it! I think your ideas are interesting but only real solid data will tell us if those would actually work.

Hey Ramit,

I notice that the promotion was for multiple courses, not one at a time like you usually do.

It may have confused people with too many choices that they ended up not caring anymore, especially when there wasn’t really any context as to why someone should buy Product X.

If you had done a promotion for just ONE of your courses, do you think it would have worked differently?

Larissa Fernandes

Maybe naming one of the problems “price” is the problem. It’s not so much “price” as it is “cost”. I believe that IWT courses are priced what they’re worth, but not everyone can afford the cost. If you take in consideration the fact that dollars are expensive, this may also say something about international customers like me. Anything I buy with dollars is almost 3x more expensive than if bought with Brazilian Real in Brazil (in my case and depending on the product/service). Also, in my case, I don’t like asking for refunds, so I’m afraid of buying a course, not liking it or getting any results and then having to take in the loss. I prefer to wait until the day I have the money to spend and not have to worry if I love the product or not. That’s me.

~~ I actually joined RBT once and then cancelled after about three weeks and you guys gave me a refund even though I didn’t ask for one – which makes me uneasy. =)

So, cost is a problem because maybe somepeople who need your courses can’t afford paying for them.

You know what would be a good idea? Maybe you already have this, but I’ve never seen it… A roadmap for launching business, freelancing, consulting, etc, using only free content. I sat down to put my finances in order and used about 4 IWT blog posts and an e-book (I think, I’m not sure) that I researched and found on the site to create my plan.

Ramit Sethi

I appreciate the comment. One of the decisions I made early on was to offer 98% of our material for free — and for 2% to be premium. I’d encourage you to use our free material to focus on savings for now. Many of our top customers used the material on GrowthLab and to save and earn thousands. When the time is right, we’d love to see you in another one of our courses.

Great takeaways in here. Plus, you got validation on your earlier belief about discounts, so you don’t have to wonder anymore.

I was in that small cohort who received the discount email. I too wondered why you guys were backtracking on your “no discounts” rule, but I also wondered if everything was okay. I tend to see discounts when something’s wrong.

You make an interesting observation about people citing price as a common objection, and I can see why you wanted to test it. Personally, I’ve noticed a lot of people use price as a smokescreen for something they’re not going to do anyway, for a variety of reasons that often have little do with price.

I recently joined “Behind the Sales Page”, and I didn’t even think of the price at first. It was a nice plus, because $300 is a ridiculously reasonable price to virtually sit with a CEO for a few hours and watch him deconstruct a $600K sales letter, but I would’ve paid a lot more for it. The reason I joined in the first place (as I told Michell this week in Philly) was because BtSP arrived at the right time when a) I needed it and b) I was confident I’d actually do it.

Thank you for this post and the amazing transparency. Personally, I believe this boils down to not enough discount (10% is too low) vs. “who will recognize the value and buy everything we offer after the initial purchase.”

There is an optimal discount value that gets you the repeat buyer as well. Not sure where that number is or if there needs to be a “run-up” series to the event (i.e. something really special is coming) to a very specific segment, just like all the other sales emails. In other words, maybe you need to cater to the frugalistas the same way you do to the general audience. The frugalistas are different.

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