Are Discounts the Devil?

I love getting discounts, it makes me feel good. We like giving discounts to good customers, or for customers who give us a lot of work:

I don't feel like it de-values our service, but shows how much we value our customer.

Biz Informer seems to hold the opposite view:

If you discount your product or service, all you're doing is telling your prospect it isn't worth whatever you're asking for it.

I understand their point, that your list price should mean something – I too hate those shops where every time you go in, they're having another sale and you wonder if they EVER sell their products for the prices they list. It cheapens the whole sale!

However, this game is all about give and take, especially if your customers are other businesses. It's all about deals, passing business on, and recognising value when it's given.

The trick is to not discount for the wrong reasons (i.e undercutting competitors to the point no ones making any money), but use discounting as a tool for creating happy customers.  

 

4 thoughts on “Are Discounts the Devil?”

  1. Discounts are good tools to please your customers and encourage them for the second purchase.

    But sometimes discounts minimize the value of the product. Each customer will feel free to request a dicounts and you won’t win out of this situation.

    The way out is to find a balance between the real value of the product and the discounts. Yourproduct should estimated by the customers and they should understand that the price is worth the software or thing. Discount should be a praise for good clients as a sourec to show your respect.

  2. It is a tricky one … but I remember a few years ago being absolutely amazed when I looked at what it COST us to work on a project compared with what we actually MADE. We were struggling to sell-in one or two projects a month … but then I put the prices up to almost double, and the work started coming in through the door.
    Sometimes you can discount too much and too early. And if your clients don’t think YOU value your work highly enough, then they wont value it either!

  3. Oh yeah… We've been there… I suppose that's more general pricing though. But man, when you price things too low, your customers get more demanding and you struggle to get jobs. Higher prices and everyone wants you to work for them… Go figure!

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