Why discounting shouldn’t be part of your vocabulary
We all want and need new clients but discounting is the enemy of all business & should be obliterated from your vocabulary. Oh sorry? You want a more balanced argument?
Growth not discounts!
Just look at Black Friday as an example – scenes worse than any free for all witnessed only in times of tragedy! What kind of customers does it attract? Exactly! Not those that you would want on a regular basis. Customers looking for cheap goods at cheap prices – you get what you tolerate!! So if you work on a 30% margin and offer a discount of 10% you would have to increase sales by a massive 50% to make up for the lost revenue!! Now, how attractive does it look?
Your ideal client!
Try a whole new paradigm of business – let’s look at the whole thing from a different perspective! So imagine your ideal client & filling your business with 80% of them. Incidentally these customers should give you less problems, pay on time & be more pleasant to deal with. Or poor customers who give you 80% of your headaches for only 20% of your profit?
‘Oh we will lose customers’ or ‘people round here are different, they won’t tolerate it’ Guess what people are people wherever you go in the world – they will do whatever is available & if you place yourself in that marketplace you will constrained to that custom. It doesn’t have to be that way so choose today to establish your identity, what you stand for & which kind of customer you seek.
These events often come as a result of clarity & the clearer you are of your target market the easier you will find it is attracting them.
What are the alternatives to discounting?
Get Your Mindset right!
It starts with mindset and clarity. Are you clear about the kind of business you want? Are you a ‘stack em high sell em low’ company? If you are then even then discounting isn’t the policy – some of these business owners are some of the shrewdest around! Why because they buy superbly well & there lies the answer! Do you have a clear policy of acquisition? Do you know what products you can offer at what times of the year to still make you a profit?
Or are you seeking your niche? This is where you select a specific set of customers for specific reasons who value that choice and who are prepared to pay for it. Have you noticed how high end shops don’t have prices in the window? Do you think they are interested in Black Friday scrums?
Food for thought! Oh supermarkets are the worse culprits – never believe a BOGOF offer again!
Click now to get the sheet showing just how discounting affects your business