When NOT to Offer Your Clients Discounts

• Thursday, January 19th, 2017
• Blog
• 2 responses

We tend to believe that discounts are magic bullets that solve any problem. Are your clients leaving you? Offer them a discount to stay! Want more clients? Sell everything at a discount! However, these are temporary solutions that, in the long run, may do your business more harm than good. Whenever you feel tempted to slap a discount onto your products or services, check out this list. If you’re idea is not here, refrain from giving that discount.

1. Don’t Offer a Discount to a New Client

We all tend to go above and beyond just to get new business in through the door, but if you start by offering a discount, you will most likely never be able to push the price up again. The price you offer plays a great part in why clients choose you, so you can’t simply expect them to pay more in just a few months. In fact, the longer they stay with you, the more discounts they will expect – at least on special occasions. Thus, you may end up losing money in the long run.

Furthermore, a client that signs with you just because of the price, is not the type of loyal customer that you want around. This client is a bargain chaser and he will ditch you the moment your competitors will offer him a better deal. I wrote more about this and other types of bad clients here.

2. Don’t Offer a Discount for an Established Product or Service

You can use discounts to introduce new products on the market, just as long as you clearly state that the price cut will be for a limited period only. But steer clear of offering any discount for your well-established products or services. This will undermine their value, make potential clients believe that you have no real confidence in what you offer and it might even end up costing you clients.

If you feel like your older products or services need a boost, offer a free trial instead or make a package with them and some newer ones. Create a “facelift”, rebrand them, add new features, or choose any other idea you may have to breathe new life into them and make them attractive again. Discounting them won’t help you.

3. Don’t Offer a Discount to Match Your Competitor’s Price

Whenever an existing or a potential client comes to us saying that they found a better offer elsewhere, we tend to match that immediately, no questions asked. But think about it: in today’s diverse and competitive markets, it’s literally impossible not to find something cheaper.

When I had this happen to me (and it happened more than once), instead of offering the discount, I pointed my client towards even cheaper prices. Yes, I showed him two other companies that offered similar services at a fraction of what I was charging. Then, I went on to explain him the difference between those companies and mine. In other words, I focused on value and this approach has never failed me.

If you feel tempted to give the discount right away, think about this: when you first started doing business, was your goal to be the cheapest provider of X service or product on the market? If yes, then by all means, discount everything you sell right away. But if that was not your goal, hold on to your price tag: the clients that are worth keeping will do business with you for the value you offer.

Adriana Tica

Adriana Tica is an expert marketer and copywriter, with 10 years in the field, most of which were spent marketing tech companies. She is the Owner and Founder of Idunn. In October 2019, she also launched Copywritech, a digital marketing agency that provides copywriting, SEO content writing, and strategy services to companies in the tech industry.