Why Discounting is a Dirty Word
Posted 15 Aug '17
Posted 15 Aug '17
When planning your next business promotion or sales tactic, discounting may be an easy campaign to implement. It doesn’t take much thought, offers your client perceived value and may allow you to drum up some new business quickly if you are in a slum.
While discounting is commonplace, it actually isn’t really doing your business any favours. Here’s why:
Shows lack of confidence
Offering a discount on your product/service can show your potential client that you do not believe in your product/service enough to sell it at a standard price. When you’ve put the hard yards in to create something and believe in it’s value then you should focus on communicating this to your prospect.
Devalues your product/service
Similar to having lack of confidence in your product/service, discounting can devalue it. Most people value something based on its price. When you think of retail brands, the hospitality industry or even airlines, lower prices, or the discounted prices are often associated with the no-frills options and if you are still offering a service that takes expertise, time and effort, discounting your prices will lower its perceived value.
Creates expectations for your clients
Discount once, you will have to discount again! Once you start discounting your prices your clients will not want to pay full price for your products/services, or hold off until you have another ‘special’. Don’t set the expectation that your hard work should be discounted.
Less profit for your work
Small business owners spend the majority of their time living and breathing their business. When you spend the majority of your time in your business working hard or paying people to do the work for you, why lower the profit you should be making on your particular product/service.
What can you do instead of discounting your products/services?
Add VALUE instead of discounting. You can create a promotion for your products/services by simply asking yourself and your team a few questions to determine the value you can offer. For example:
Who are your target market for your particular product/service?
What can you do that is relevant to your target market that could increase the value and make it more appealing to purchase?
What will make it stand out from competitors?
What can you offer that no-body else is?
What is the need for your product/service in the market place?
When you answer these questions you can begin to add the right value for your products/services and create a promotion around them accordingly.
If you need help with adding value to your business then please give us a call! You can find us in Brisbane or on the Gold Coast:
Empire Accountants Brisbane Office
Phone: 07 3124 0244
Empire Accountants Gold Coast Office
Phone: 07 5630 6585
As June 30th rapidly approaches, it's important to consider strategies that can help you minimise your tax liability for 2024. Whether you're a chippie, doctor, engineer, sales rep or architect, considering some of these tips below and whether they apply to your circumstances may save you paying more in tax than necessary.
Rivers focuses on providing great-value general insurance solutions that work. These solutions are delivered to both individuals and businesses that have been part of the communities in which we have lived and worked for many years.
The superannuation work test serves as a pivotal requirement for individuals navigating the landscape of voluntary contributions to their superannuation fund, especially as they approach and surpass the age of 67. But what exactly does this test entail, and why is it so crucial?