Without a doubt I love me a good sale. If we’re being a 100% real, it’s my favorite four letter word! But one thing I learned in my entrepreneurial journey is that sale is not a word you want to use if you’re trying to sell a high ticket sale item. Which only leads me to the question: are we being hypocrites if we buy at discount prices, but don’t sell at discount prices? Is there a time when we can actually cut our prices and it still work in our favor?
On today’s post we’ll be talking about all the reasons why you shouldn’t discount your high figure products or services, and when you can really give people a discount. Let’s go!
Why You Should Not Discount Your Prices
Okay so let’s go back to that sale example. I’m sure many of you guys will wait until the end of the month, end of the season, or even until Black Friday to really hop on those sales. And this is the exact reason why you don’t want discounting and sales to be your go to business strategy. When you have this model, you…
Train your customers and clients not to pay you full value
The reason is because: if you’re willing to cut the price once, you’re willing to do it again. Your people will almost always wait until you have a sale instead of paying you at the exact moment they need you. This is especially true if you’re giving a discount with someone who has never worked with you. (Side note: Think about it, someone who hasn’t even established a relationship with you, is already asking you to compromise! I can only imagine what other things they’ll be asking for next.)
Devalue your service or product.
You’re essentially saying “Dear customer, remember when I said this was $2000, I was just playing you can get this for $200.” Lucky for me, I learned vicariously through other peoples mistakes. Because if you are like me and you’ve ever done this before, you’ll know that there was someone out there saving up their coin to pay you that full $2000. And just as they were ready and willing to hand you over the money, you came in with the lower price. This is what the industry calls leaving money on the table. But what I like to call, throwing money ing the trash. It’s a gut punch, especially when the client or customer tells you that they had budgeted more money for the project.
So now that we know these two things, the question still remains: Can we cut our prices and still make money? The answer is Yes! There are some actually circumstances when you can have a sale, or special offer in your business.
When You Can Discount Your Prices
You can definitely provide a special lower offer for…
Loyal clients & customers.
People who have worked with you before and have continued to show that they love working with you in my opinion without a doubt have earned the right to ask for or receive a discounted rate. They could spend their money anywhere, but if they choose to work with you, then sweeten the deal! This helps to strengthen the relationship between you and the client so that they’ll keep coming back for more.
Clients or customers paying in advance.
You may have seen online courses or products where they give your two options: do monthly payments, or pay all at once. The people who pay all at once (or pay in advance) are usually the ones who are saving money, because they are offered a discount for making that advanced payment. So if you’re looking to give people incentive to make a full payment, then you can offer a discount.
Clients or customers buying in bulk.
Let’s say you have multiple programs or products, and you have someone who is willing to buy more than one. This is a circumstance where you can offer a value pack price to help them save a few bucks and again giving them more incentives to make more than one purchase.
People who are willing to be part of your beta program (or product).
If you’re coming up with a new product, event, or service that is brand spanking new and you want to test it out to see if it’s something that will work for your business in the future, then here’s another opportunity to give your clients and customers a special offer. A personal example was in 2019 when I paid for a mastermind that was brand new. I hopped on it because I knew the price would go up in the next round and it did!
Something that you’re getting rid of.
Finally, similar to the beta program model, if you have an offer or product that you no longer plan on selling (especially if it’s not helping your business bring in profit) go ahead and offer a discount. In this circumstance, you’re not throwing money in the trash because this offer will not be a main source of income for your business anymore.
For the most part, while you and I may love the idea of a good sale, when it comes to you business…
- Do train people to value your services and offers by selling at full price
- Do not give discounts willy-nilly because you’re desperately looking to make some revenue
- Do give discounts to people who have shown they are loyal and repeat customers
- Do not give discounts to people who have never worked with you. They have to establish a relationship first.
- Do offer prices incentives for people who are willing to pay in advance or buy in bulk
- And also, do give discounts for people who are willing to pay for a beta program or want to take advantage or an offer that you’ll be retiring.
I want to know, have you ever offered a discount to your clients? Did it help or hurt your business? Let me know in the comments below!