Have you been tempted to offer discounted prices or fees in an attempt to win the business? Have prospects asked for discounts, promising to give you the business if the discounts are granted?
What did you do?
Cutting the price to win the business is a strategy that has the potential to do more harm than good. In the short term, you may win a piece of business, but at what cost? By offering a discount, you “brand” your product or service. What does that brand suggest? The suggestion is that your product or service is not worth the price originally quoted. To make matters worse, the suggestion carries over to future quotes for products or service. Once you establish a precedent, it’s hard to break it.
To compound the matter, discounting your products or services creates a perception of greater value for the products and services of your competitors who don’t discount. How? If a prospect has the choice of paying your competitor’s regular price for a service or your regular (non-discounted) price, he is likely to perceive that he’ll be receiving greater value from your competitor. Why? Because buying from you when your service isn’t discounted would be an apparent loss—paying more than the previously established value.
What clients and prospects really want is value. And you can create value in ways other than discounting. Rather than charge less for what you deliver, deliver more than what you charge for. Bundle in additional relevant services. The impact on the bottom line is likely to be less than out-and-out discounting. And, more importantly, you change the “brand” focus from price to value.
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