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You need to be careful with how you handle product pricing discounts. If you aren't, you could create a PR nightmare like Tesla has recently.Let's talk about how they created this mess so you can avoid it. Plus we'll get into how you should manage it instead to avoid this situation altogether.If you want to reach product-market fit faster, sign up for my free 5 day email course here - https://nxtstep.io/fit/Episode TranscriptHey, Folks. Sean Here.And today, what I want to talk about ishow NOT to manage price discounts for your product,with an example provided by Tesla and the recentdiscounts that they've provided and the PR nightmare thatthat's caused, especially in China.So if you're unfamiliar with this story,Tesla has more recently been steeply discounting.Several of the models that they offer all overthe world to the tune of thousands of dollarsin some markets, and in particular, customers that havepaid need for the tesla vehicles before these pricediscounts went into place are very upset. Why?Well, because the discounts are not applying to themin any form of refund or anything like that.So, as you can imagine, if you were oneof these people that purchased a tesla at itspreviously higher price, in some markets, considerably higher price,you probably wouldn't be very happy to learn thatall of a sudden, they produced that price bythousands of dollars, and it doesn't apply to you.Now, in certain areas of the world, in particularin China, this has become a total PR.Nightmare where their customers that havepaid that higher price have beenstorming their stores and vandalizing them.Because how Tesla has treated this situation andthe fact that they're not offering them anything,in fact, it all feels pretty poorly planned.And the execution does as well.So this is among some of the riskthat you can experience if you're going tostart offering discounts for your product.And that's why I say it reallyis important with how you manage it.Because if you don't, it can turn into a PR.Nightmare like this one.This is the last thing that you want to see. Right?I understand that they're trying to incentivizeselling more vehicles, but they didn't executethat plan well, especially in China.Now I want to talk a little bit aboutthe difference in the markets as well, too, becausethe Chinese market is different than the American market.And what I mean by that is,in China, they leverage a different model. In China.They Have A Direct Sales model, which WeDon't yet have here in The United States.But it seems like things arekind of pushing in that direction.Although it's undetermined when something like thatmight apply in the United States.But in China they have a direct salesmodel, meaning that price transparency is very high.So everyone could see where yourprice is and where it's been.That means that you need to treat how you manageyour price differently in the Chinese market than you doin the American market, where there's a dealership network.The dealership network is kind of like thewholesale retail model, where the dealer, the manufacturersprovide the vehicles for a price to thedealership, and then the dealership has some priceflexibility in terms of what they want tocharge from there based on market conditions.And they can manage incentives andall that type of stuff.So American consumers are accustomed to therebeing some of these incentives that comeand go, incentivizing them to purchase atdifferent times and things like that.So the way you manage the process inthe American market should not be the sameas how you manage in the Chinese market.And that appears to be what Tesla essentially hasdone here, where they kind of just rolled outthe same strategy in both markets and no previouscustomers are happy anywhere but in China.They're particularly upset becauseit's very, very uncommon.So you really need to be careful howyou manage price discounts for your product.In fact, I would really never would like to seeyou offer price discounts, but if you are going todo it, you really shouldn't have to do it ifthe value is high and the value is strong.I think that's really some of the underlying fundamentalissues that are going on here at Tesla.But if you are going to manage it, youneed to make sure that you manage it well.Otherwise you could create one ofthese PR nightmares for yourself.So I want to talk to you about howyou can manage this process much better than Teslahas to avoid this PR nightmare that you mightexperience yourself as well, too, if you want toget creative with your pricing for your products.And in particular, this applies when you're talking aboutdiscounting your product and how it applies with managingrelationships with your previous customers, who you should betaken care of as well too, because they shouldbe brand ambassadors for you not going around tellingeverybody about how they got shafted by you, whichis probably what these Tesla customers are going tobe doing. And it's going to causeuntold brand and reputation damage.So that is not worth it at any price.But if you do want to get creative withhow you're managing your pricing, in particular, you wantto offer discounts, but you want to do themin a creative way, in a way that worksfor everybody, you've got to get more creative withhow you manage your relationship with your previous customers.Now, I've seen other product companies try to do this aswell, too, and it always creates a form of backlash.So you have to expect that because people havepaid a higher price, then you're all of asudden charging for the product right now.So you need a story to be able to sharewith them or something to provide for them that's goingto make them feel okay with the situation, like grandfatheringthem in for whatever they had paid previously.Like, for example, if you wanted to offeradditional services or you wanted to switch toa subscription model or whatever it is, howeveryou're changing your pricing model, right?If you want to do that, then you need tomanage the process with your existing customers in a differentway than you're managing it for everybody else.That's completely new to your product.That's where you can make a clean break.So whatever they've paid before, if that wasexpected to include whatever features and upgrades youwere going to add to your product movingforward, you should manage it that way.So you have to bifurcate how you're managing this basicallysubset of customers in order to minimize the backlash thatyou're going to get from making these changes.Now, everybody understands and expects there to be changesto products and product companies along the way.That's something customers, for the most part, arerelatively familiar with, but they're not looking foryou to take advantage of them.That's going t...