I’m not a fan of discounts.
I don’t even like my clients using the word ‘discount’ in a pricing situation.
Some businesses, like retail and restaurants, benefit from ‘discounts’ under another name; holiday sales, happy hour, and early birds etc. These help push products to make room for new inventory and bridge the gap during slow times and help cover operating expenses.
But in many scenarios, discounting can do more harm than good:
- Reduces the perceived value of your offerings
- Buyers get addicted to discounts
There are a few scenarios I’ve seen play out over and over:
- Discounts typically attract resource-intensive customers (read: complainers)
- The discounts add up over time – think months and years not just once!
Try these instead:
- Replace the word ‘discount’ with the phrase ‘Special Rate’ or ‘Special Offer’ and use them as incentives to the terms: e.g. 5% off for payment in full upfront.
- Make your default action to add value by providing something extra instead of discounting and eroding your profit margins.
“Tossing in something complimentary that doesn’t cost you much extra is preferred because it adds value and buyers don’t get addicted to free.”
The Bottom Line
Buyers won’t expect you to give them complimentary addons every time they do business with you.
But if you train them to expect a discount, they will want that discount honored every time.