How often do you offer discounts on your services or products? Do you know why?
So back in 2018 we ran a few discounts, most notably we offered all new businesses 50% off website designs – and to be honest, I don’t think we had a single enquiry based OFF that. In fact, I shot myself in the foot more than once telling enquiries we did this, afraid I’d lose them.
When I won the Forward Ladies Regional Awards, part of the next stage was a live judging day. This was held in Manchester and we were basically interviewed by 3 judges about the nomination and what we do. Part of my application had been to say how we offer these great discounts…
So, cue the interview which I felt went very well – in fact, I learned loads but that’s a blog for another day. One of the questions that will always stick with me though is why do we discount our services? We had a really good chat about it (forget Apprentice style grilling, this was very much more like a group of us understanding what my business did, while I also learned too). So my reply was of course we have to compete with our competition, other companies do this as well and new businesses will appreciate the gesture. This all seemed very legit to me, and still does in some respects.
One of the judges just came out and said it – “but you’re under-valuing everything you do”. When it comes down to it, by offering 50% it showed people that we didn’t believe in our 100% prices, we were happy to do that work at half the cost, so is that a business you want to give your money to? Right it’s different if you sell items perhaps that are now going out of fashion, but in terms of service to service type businesses, it’s a very valid point.
On my long train journey home I remember mulling this over, and contacting Emlyn. We agreed that yes, we were giving the wrong message, and there are other ways to help these businesses. We remove that discount, and can honestly say we’ve never looked back.
In fact, in the 2 years since, I’ve only ever had someone ask me for a reduction in cost once – and I said no, sorry – and they came to us anyway.
So, if you area B2B business and you’re offering a huge discount – have a rethink. Not only are you completely undercutting the market, but you are playing a part in devaluing that service too. I think discounts or freebies can be offered in certain circumstances, but shouldn’t be as a general “always available” deal. Would love to know your comments below if you have any thoughts!