Think Twice Before You Offer Discounts
How many times in the last 4 weeks did you offer discounts for your services/products?
And, how many of those times did you offer it without your client even asking for a discount? In the last few days I’ve heard this over and over. People “confess” to me they offer discounts without even being asked for one. In each instance, they have reasons to offer discounts.
Reasons such as:
- “The client couldn’t really afford my services.”
- “I didn't think the client should pay the same as my corporate clients.”
- “I didn’t spend the full hour with the client.”
- “I offered a discount so they’ll refer business to me.”
- “I enjoyed my time with the client so I wanted to do something extra.”
My response to each of these reasons:
- “How do you know what the client can and can’t afford? Did you discuss this in detail or did you make this assumption? What would have happened had you offered the client a payment plan vs. a discount?”
- “Do you offer your individual clients different services than your corporate clients? And, do your individual clients get less out of your services than your corporate clients?”
- “Did you meet your clients expectations? Did your client leave happy and satisfied with your services?”
- “Did you tell them you gave them a discount because you’d like them to refer business to you? If not, how will the client know to do this?”
- “I’m so glad you enjoyed your time with your client. If you wanted to do something extra, what else could you have done that wouldn't have cost you money and let the client know how much you appreciated spending time with them?”
In the end, it’s your business. You get to decide when and how much of a discount to offer to your clients. However, ask yourself, is the reason for the discount truly one of the many reasons listed above or is it because you’re not valuing your time and your services?
A few years ago, I broke down the numbers for a client who offered a random discount to one of her customers without the customer having asked. The service she provided normally would have been $1500. She gave the client 50% off because she thought the woman couldn’t to pay full price. When I asked what her customer would be making and how much more business she’ll be booking after working with my client, the conservative number was $3500 before the end of the year. And in the next 5 years we estimated her client would book over $200,000 in business using what she learned.
Hmm, when you look at it this way, do you think the customer would have minded paying the full $1500? Most of us would pay a heck of a lot more if we expected a return of $200,000 in the next 5 years.
More importantly, when you think about what the long term impact your services have on your clients lives, is a discount necessary? Are you sure you’re doing your client a favor?
Your Savvy Sales Tip this week: Refrain from offering discounts to clients when they haven't asked. Chances are you’re only hurting your business in the long run.
When you offer a client a 50% discount, you have to work twice as hard, find twice as many clients and double your marketing budget to account for the difference. Do you want work that hard and spend that much all because you felt compelled in the moment to discount your services?
Catch yourself before offering a discount. Decide if offering a discount is helping or hurting your business. If it’s not helping, don’t offer it.
Wishing you a successful and full priced week.
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