Do you discount prices in order to attract clients? I once had a client who thought it was a great idea to offer 1 free coaching session for every 3 sessions booked in advance. Her prices were already on the low side, and she had a $25,000 student loan to pay in addition to monthly operating costs of about 40% of her gross income. She came to me because she was working a lot but couldn't afford her car payment and barely had enough to eat. “How can I be so successful and busy, but be so broke,” she asked me.
Pricing your services fairly and correctly is part art, part science. If you decide to discount prices as a marketing strategy you short change yourself. Here are 6 reasons not to constantly discount prices:
- Constant discounting creates expectations in your existing clients that they can always wait for a better deal. Wonder why clients aren't rebooking right away? They are waiting for your next e-mail offering a discount!
- You train your clients that you aren't worth your full price.
- It fosters a believe that you are overpriced to begin with when you constantly discount.
- A campaign of discount e-mails creates customer deafness to discounts – they become numb to the tactic because you have overused it.
- It makes you look totally desperate for clients.
- When you discount too often, in essence your discounted price becomes your full price.
When I pointed out to the client that her prices were, in essence, a full 25% below her stated price she finally got the point. She was working hard and basically discounting herself out of business.
You can read more about discounting as a pricing strategy in this article by Patrick Campbell, “How Discounting is Killing Your Pricing Strategy.”
One of my earliest mentors advised me to price fairly but adequately and to “stand tall” once my prices were set. I agree. If you are nervous about how to price what you offer, I invite you to set up a One and Done hour with me and we can talk pricing strategies. Before you discount prices look at other marketing strategies. Your bank account will thank you and your self-respect will increase.
Thanks for sharing this, it’s great information to keep in mind. The challenge is learning how to price effectively, finding that balance.
I find the less I charge, the less people value what they’ve invested in, so I don’t discount, I raise prices and offer my product at “this price” for one more week before it goes up. It’s the opposite of a sale 🙂
I’m fine with people offering a free initial consultation of some sort (and yes, they better convert into paying clients) but I am not a fan of discounting. You know me–I don’t even like saying the “d” word. In my opinion, you may as well use “discount” and “devalue” interchangeably.
Discounting your own prices is like competing with yourself – and in that case you’ll almost never win! I’m a much bigger fan of adding value to sweeten the deal than discount the price.
The offer of a free initial session is one of those subjects
where people fall on one side or the other with valid
points to support either side. Everyone should offer
a variety of entry points in order to work with them.
The one absolute rule if you are in business is you have to
be able to earn a profit.
If a biz owner decides to offer a free initial session their conversion rate better be high. 🙂
Great topic that is often a challenge for so many people when they tie value to their personal worth. I particularly agree with point 2.You train your clients that you aren’t worth your full price. the other challenge is they then tell other people.
Good points! Is there ever a time to offer discounts and how do you suggest they are done? How does discounting differ from having a sale?
I am hosting my first summit next month and will offer the audios and transcripts at a discounted price for the duration of the 2 week event and then it will go to the full price. This is the price that it will be sold on on my site going forwards. And then may come down if I have a sale in the future.
I think you’ve asked enough questions for an entire teleseminar, Trudy! Great questions. I’ll address them in a future blog post.
can’t wait to hear more – thanks Sue! 🙂
Excellent advice Sue! Funny you mention this because someone just told me I need to raise my rates ha!
I’m not surprised! Do it, Mary Ellen!!
Thanks Sue. I appreciate your kind and smart advice always!