Why Discounting is a Disservice
To discount or not to discount -- that is the question.
Since the Great Recession a decade ago, discounts, coupons, slashing prices, and flash sales have been the norm in many industries, so much so that some shoppers have the mentality of “I never pay full retail price” and expect to have a discount on everything, even services.
It would be easy for the small to medium-sized business owner to assume that discounts and coupons are just part of doing business, that it’s what you have to do to close a sale.
But there’s a downside to discounts. Once you start down the slippery slope, there’s almost no end in sight. How big of a discount is enticing enough? Should you raise your regular price so the discount won’t hurt your bottom line so much? You might be thinking, “I’ll just offer a discount to first-time customers,” but by doing so you set a bad precedent. A repeat customer who initially received a discount will almost certainly want a redo of the discount on future transactions as well.
And you might find it difficult to look yourself in the mirror if you’re feeling that you’ve been unfair to those customers who paid full price.
When you open the can of worms that is discounts, your well thought through pricing structure is reduced to mind games.
An unapologetic, stable price demonstrates confidence, integrity, and trustworthiness. It also sends the perception that you believe in the value of the service or product that you’re offering.
In today’s episode, you’ll hear my own experience with discounts, from both the giving and receiving end. You’ll hear about the repeatedly discounted “bottom line” price I got at a car dealership and why it left a bad taste in my mouth. We talk about perception is projection and why, if you expect discounts from others, you can expect others to demand discounts from you as well. Finally, we discuss non-discount methods for reeling in first-time customers.
Thanks for listening!
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Links from today’s episode:
- Episode 2 -- we learned about “perception is projection.”
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