Giving discounts or reducing prices seem normal to get more business. But it might not be a good practice in the long run and could be one of the reasons for not being able to score the really big deals.
I know this is the opposite of what most people think, but it’s the truth. Of course, this might not be true for every business; there are always exceptions.
Discounting is considered fear-based selling.
For example, what would you think if a world-class surgeon you were seeing offered you a coupon code for 50% off if you bought surgery by Friday? In one way or another, it creates a feeling of desperation.
Resist the urge to discount your prices.
Because the lower your price, the lower quality clients you attract.
Another point to take into consideration is the fact that depending on the importance of your price reduction, you will attract customers who are able to pay the promotional price but not necessarily the full price. An example of this behavior is restaurants that offer discount coupons on various promotional platforms.
Although these promotions bring new customers, the restaurateurs with whom I spoke told me that the customers who came did it almost exclusively when there were promotions. Very few returned without the coupons.
1) Lowering prices attract lower-quality clients; you will attract people who are more concerned with price than results. Unfortunately, these clients are not exactly FUN to work with.
2) Lower prices push away potential high-paying clients, making that a double disaster.
3) Lower fees will attract clients who push the boundaries. You end up doing way more work than you intended, and mostly these clients are very hard to satisfy.
4) Charging low fees means you get less commitment from your clients. Rather than being ‘all in,’ they’re instead ‘half out.’ The size of a client’s commitment and follow-through will always be equal to the size of their investment
(HINT: the more they pay, the more they’ll actually DO to get results from your service!)
5) Giving large amounts of discounts makes the actual price seem too much.
Of course, we all want to make the client happy instantly, but giving discounts is not a good option, and it is certainly not the only option.
Don’t try to compete on price. Instead, offer an attractive value proposition. Work with your clients to understand their business requirements. In order to close the deal, you need to be bold and know how to get the job done. Here are six steps to close every deal.
Instead of reducing prices to increase demand, provide unexpected added value to promote repeat customers and their recommendations.
I see a lot of smart, good humans who are held back from raising prices because of a “mindset” limitation.
If you want to create urgency, bundle your stuff with industry colleagues and promote events instead of discounting. Never reduce your price unless you are willing to suffer agony.
Ensure that the value you provide your clients is in line with your pricing.
You ultimately need to decide what kind of service provider you want to be. The good news is that it is just as easy to compete on value as price. So choosing the road that leads to less profit makes no sense when you can easily do the exact opposite.
So I’m going to repeat this, “Double your prices and watch your client satisfaction soar”!
