To discount or not to discount, that is the question

By Posted on 2 min read 288 views

Have you ever offered discounts for your products?

You probably have, most people do. But they do it all wrong. They offer a discount because they’re not selling enough, or they want a quick injection of cash and are happy to get it for less.

But they’re not thinking about the overall effect that’s going to have on their business.

The thang is…

…while it’s easier to sell something with a discount, it can also cause a shift in how people view your business.

For example, in the UK we have an Italian restaurant chain called Pizza Express, and when they started to expand, they began offering deals.

Thing is, nobody goes there unless they have a discount. I mean why would you pay the full price when you can ALWAYS get a discount.

Heck, when we ate there the other day, even the waiter asked us if we had a coupon to use.

I mean WTF?!

People would eat there anyway, at the full price, but they’ve used discounts so extensively in their marketing, that nobody goes without at least 20% off.

Hell, they’re still making a lot of money, so fair enough.

But it changes peoples perspective of your business.

In the early days of Pizza Express, it was considered a decent place to eat. Now it’s consider a cheap place that does decent food.

That’s a big psychological shift in the mindset of your customers.

As a customer, if you know that a company offers regular discounts on their products, do you just go and buy them or wait for the next discount?

You wait of course.

Yes… there’ll always be the odd person who wants the product now and won’t wait, but a lot of people will hold off until they can get it cheaper. They’re not prepared to pay the higher price when they know all they need to do to get it for less, is be patient.

Remember, patience doesn’t cost your customers anything!

If you never discount your products, it may take you longer to sell them, but your customers will have a different opinion of them.

They’ll assume that you don’t need to give discounts on them. They won’t base their purchase decision on whether they have a coupon or not.

They’ll buy the product where they believe there’s enough value in it for them.

Now this isn’t to say that you shouldn’t offer discounts. I do in a lot of my businesses.

What I’m saying is…

You shouldn’t offer a discount just because you’re desperate for a sale. You should think through the impact it will have long-term on your overall business model.

Michael

P.S. You can still access the second video from 12 Week Mastery here.

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