So you think that price discounting is a solid marketing strategy?
Over the past couple of months, when attending events, I notice that a lot of businesses when introducing themselves, offer discounts for their services or products as introductory offers.
If you think that you need to discount your price to make those sales targets, think again, or more importantly, think differently. If you don’t you will be discounting yourself out of business. Discounting eats directly into your profits, and you’ll be amazed at how many more sales you have to make to make up for the discount given. You may think discounting works, because your cash flow is up, but in actual fact it is speeding you up for a grand finale.
Don’t get me wrong, price is important but it’s definitely not number one. Remember that only one business in any area can hold the position as the cheapest. What’s really required is probing in the sales process to identify what the buyer really wants and then structuring a solution to suit their needs. Move to value adding rather than cutting back on price.
Evaluate your own negotiating skills. What inevitably happens is that the buyer wants the best or highest quality product or service for the lowest or cheapest price. Well the reality is that the two are like oil and water – they just don’t mix. So put this squarely back in the buyers lap and ask, “If you want to go ahead, which one are you prepared to sacrifice – the quality or the price?”
BUT… you’re saying, “My industry is different – you don’t understand!” Well if you were right, then we’d all drive the same car, eat in the same restaurants and live in the same neighborhood. The fact is we don’t, which shows there are more things that are important to people than price. What they’re really interested in is VALUE, which is quite different to price. You’ve worked hard for your product or service and you’re entitled to charge accordingly.
“Price is what you pay. Value is what you get.” — Warren Buffett
Have a great week,