Learn 6 strategies for price discounting and when to resist the urge.
When a customer hesitates before buying your products or services, salespeople are always tempted to offer a discount to “sweeten the deal”. It seems to be a fact of life, perhaps connected to an innate desire to please people.
But discounting has a major effect on both profit and cashflow. Do you actually know how big the impact is?
There are times when this is the best option, but make sure you are aware of the consequences first. Many times our instincts are not helpful, and we need to learn to work around them and get comfortable with the consequences.
Planning ahead
Don’t create your pricing on the spot but think about it in advance and set a pricing strategy for your business. When you are dieting, it’s less tempting to snack if you are actively counting calories. In the same way, it’s less likely you will discount if you have planned ahead and have a cupboard full of healthy alternatives.
Your prices should reflect how you want your brand to be seen. If you pitch your prices low, you will be seen as low value. And if you discount too quickly or too deeply, cynical customers will assume that your initial price was over-inflated.
So here are six price discounting strategies to plan your approach. If you are sweetening a deal for a customer, does it align to one of these strategies? Or are you just trying to please them at the expense of your own business?
Discounting may come from a desire to please, but it can also be a habit that we have become lazy about. Unless you have a good strategy, use discounting sparingly. Focusing on customer needs and your own values will bring you much higher profits and better cashflow.