post by Stephanie Nelson
Over the years I’ve heard a lot of discussion amongst business owners about offering discounts and how to go about doing it. Here are a few tips on offering discounts that I’ve gleaned over the years.
As one business owner said to me when I first went out on my own, your price is your price. If someone doesn’t want to pay it, they’re not the right customer for you. The other piece of this that I’ve learned over the years is that if someone asks for a discount, they likely already don’t value your time, expertise, and/or skill, so they’re going to be a PITA from the get-go, so you’re going to end up doing even MORE work for less money.
- Document discounts well.
If you do decide to give a discount, make sure your client knows upfront and is reminded regularly that they are not paying full price. The easiest, most non-flagrant way of doing this is to put in whatever documentation your client has to sign to come on board with you that they are working under a negotiated rate, then use your invoices as your reminders. The few times I’ve offered a discount, my sign-on document said, “Negotiated rate: $X (regularly $Y)”. On my invoices, I listed the service as one line item, with the regular rate. The next line item showed “negotiated discount” and the amount I was lowering the price. By doing this, the clients repeatedly saw that they were not paying full price, but I wasn’t hounding them about it by constantly calling and saying, “remember, I gave you a discount.”
- Make any discount believable.
This one just recently struck me. I signed up for a series of webinars. As is typical, I got the barrage of follow-up emails with the “buy now before time runs out” offers. I noticed the offer was going to cost $39. But then I saw that the “value” of what I’d get for the $39 was $1500. That makes NO DANG SENSE!!!!! In the next email, I was still only going to be charged $39, but the value had jumped to $2900. WHAT?!?!?! I immediately lost complete faith in anything this person had to say or sell. I even lost a bit of faith in the other presenters in the webinar series because they agreed to work with her. But I cut them a bit of slack by telling myself that they may not know this was how she was presenting things. (Side note: You need to know how you’re being presented because your brand can be affected.) Seriously, if you’re going to publish a value of $1500 or $2900, the price you actually charge still needs to back that up – or your undercut yourself in more ways than just money.