Are Discounts Destroying Your Business?
Why the change?
The truth is that early bird discounts can be a way of improving cash flow by encouraging clients to make a decisions earlier. And they do eat into your profit.
I remember years ago doing some number crunching at an Action Coach event where they looked at how much you can improve your profit by increasing your prices by just 10% and how much you lose when discounting by 10%.
Whilst business is not all about money it is about making the business profitable.
So my question today is why are you discounting? Is your inner critic encouraging your to discount because you don’t truly believe people will pay full price? Is your attention on what is not working and you are losing sight of the value you bring?
Do you focus on how much time you spend and still calculate your value based on an hourly rate rather than the difference you make to people’s lives.
Whilst there are proven human psychology that we do love a bargain and that people will buy when they think their is scarcity – Karen and I also felt that this is something that is so over used now that no one really values the full price. It is like they assume you put the prices up so you could discount it. And that was not the case for us. We had priced the events based on having more delegates and one facilitator and kept adding more and more for added value and then discounted if we are honest because we lost sight and confidence we could fill the events.
We decided to get some clarity about our reasons for discounting and today I want to encourage you to get curious.
Are you hanging onto discounts because it makes good business sense or it is for emotional reasons?
I know that I personally eventually don’t see the full price as what it is worth and I see the value as the discounted price.
Karen and I thought about it and the main reason was to encourage our clients to book sooner because it made us feel better when we knew we had some places booked and paid for. We get excited when we know we have people booked because we instanlty know we get to do the thing we love.
So we explored how we needed to be, to be comfortable with uncomfortable longer. To trust that the right people will book and all will be okay.
You can see from the article Karen and I wrote that we realised quite quickly even we had forgotten just how much we gave our clients for their two day workshop valued at £750. That gave a small group of 8 access to the two of us for two whole days, plus the wisdom and knowledge in the room, plus access to our online forum and we give away on line resource libraries too.
We give our clients access to webinars and we nearly always offer 30 minutes one to one pre and post workshop. Not to mention the pain we alleviate and the time we save people by asking the right questions to put their attention on their next best step. Not to mention the thousands they can save by the mistakes we can prevent.
Then if you add in how much our clients increase their own bottom line because the book writing process gives them greater clarity and confidence in their own knowledge they can increase their prices, reduce how often they discount.
If anything £750 for 2 days workshop was undervaluing what we offered. We were no longer looking at the bigger picture.
What we discovered is that we were not truly valuing what we gave our clients. We had overlooked many of the things we give away for free as a thank you for doing business with us.
Then we rememberd we had a large number of individuals telling us they were interested and we only had 8 spaces on each event. We also noticed that we were only running these events a couple of times a year so that created scarcity in itself.
Then we looked at a typical event – discounting was costing our business £1700 so we looked at what kind of strategies did we need to have in place to be comfortable with uncomfortable long enough to get the bookings at full price.
Much of it came down to belief in ourselves and our service. We knew logically we delivered a good service but emotionally our critic was not convinced.
Don’t get us wrong we do still discount – we offer existing clients special bundle packages and we do pay referral fees and we will have the odd flash sale maybe ?
But that is a strategic decision made because we can afford to give our time away or we want to thank our clients not because we are desperate to get bookings.
What are your thoughts about discounts?
Are you someone that always needs a bargain to buy?
Or are you willing to pay for what you know is great value and is what you want and need right now?
How do your clients buy?
Is your critic causing you to put your prices down instead of up?
Love to hear your views.
To find out more about why we changed our process you can read the article Karen and I wrote here:
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Need to manage your critic? Want more clarity? Book a 30 minute call today with no obligation and I will happily set you up to know your next best step.
About the Author – Sheryl Andrews – The Strength and Solution Detective
Sheryl Andrews, Founder of Step by Step Listening, is well known for her fast speaking and her passion to make things happen. But what many of you may not know is that in private behind closed doors she was also no stranger to lapses in self belief and an overwhelming sense of not being good enough.
That was until she conquered her sensitivity to criticism and her fear of not being liked.
Today, Sheryl runs safe to speak retreats where you can develop resources and skills to gain clarity and confidence of what you want and how you want to be and all the time you will be improving and changing the way you respond to feedback.
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