When you’re a business owner, offering discounts to increase your sales is a valid sales tactic, but it’s not always the best one. Discounts sell on price, which strips the customer of the ability to focus on value. You don’t want your customer focused on price rather than value, because it leads to them holding out for “cheaper” alternatives, sales and temptation to ask you to “price match” with the competition.
Don’t get me wrong. There is a time and a place for using discounts. Discounts can be effective for driving sales, however they must be used thoughtfully. Most sales discounts are applied loosely, and that’s bad for business. Did you know careless handling of sales creates poor perception of brand value and product effectiveness?
Discounting without Damage
I’m not saying to throw away the concept of sales and discounts in your price strategy, but what I am asking you to do is re-sculpt your sales designs and discounts. Here’s some top-of-the-dome ways to do so.
1. Add value instead of discounting.
Building up the value with specific, intentional add-ons increases the price without stressing you out, and keeps you from having to “discount” your greatness. When Rihanna wanted to make more money, she didn’t drop album prices. She dropped albums with special add-ons. She had her Unapologetic bundle that was $250, and included all kinds of limited-edition goodies. She also created smaller bundles at lower prices that were still high enough to drive profits.
What can you add to your services that reinforce the value of your offer without triggering a drop in the perception of your brand’s overall value? Make sure what you’re adding is relevant to your main offer. Don’t start giving out T-shirts and coffee mugs for the sake of having a bundle of swag, especially if your audience doesn’t give a damn about coffee or even wearing your logo.
Also, don’t feel tempted to add another product or service just to add it, especially when it’s not even something that will enhance the value from the main product being sold.
2. Stand your ground with discounters.
People will ask for discounts. They will ask about student discounts, homie hookups, and even competitive discounts to match prices with this or that person. If you offer a modest discount for specific groups, like students or teachers, that’s cool. But don’t allow someone to push you to discount on the basis of “matching” competitor’s unless there’s a specific strategy involved.
When someone is pressing for a discount on a package of products and/or services, and you want to cut to the chase, switch it up by asking them, “Okay, so what do you want to remove?” This forces them to point out what they do and don’t need, and at that point you have the option to price a la carte.
3. Don’t give away something priced at a premium.
When you give away premium-priced materials, either for free or at an intensely lower cost than previously before, you’re screwing things up. Your customer sees your product is available at a cheaper price and feels resentful of having paid full price only to see everyone else has access for free. And – even worse – your work is devalued. Because people know your stuff is available for free or cheap if they hold out long enough. Why do that to yourself?