Hold Your Price And Discount Carefully

Hold your price, unless you have intentionally up-ticked it and your pricing strategy includes frequent discounts as an inducement to buy…if not, hold your price!

How many times do businessmen discount, cut prices, for no reason other then wanting to make the sale too badly,  without the buyer even asking?  This insecurity at its best. It’s called negotiating against ones self. A very silly thing to do. You got nothing in exchange other then a lower price and therefore less profit.

How many times do we discount just because the customer asked for a better price? Way too many times. You can say no, and most often the customer will buy anyways, just testing if you will give something away.

I even see and hear about owners and salespeople discounting without even being asked or challenged by a potential customer, just to presumably get the order! Simply discounting because they can…a demonstration of personal power and importance.

How about this for a mantra, “I will not discount price ever, for any reason other then quantity discounts, inventory liquidation, or other legitimate planned and advertised purposes.”

We spend much effort in determining price, and profit is why we are running a business.  Why would you then discount it in a blink,  personal weakness? Insecurity and bad business practices. So, what will happen if we refused to discount and hold the advertised price? You may lose a few sales, very few, but the ones you did not lose, most of them, will be far more profitable because the price was  held.

If you need the reasons, here they are: profit, profit, profit, the basic reason we are all in business.

Value added selling is the basic reason to maintain your price even if it is higher then your competition, or higher then the customer wants to pay. It is not appropriate or necessary to decrease a price unless for a specific sales strategy. There are many reasons your price should be what it is, irrespective of what the competition may be selling similar products or services for.

Possibly it’s because of the painstaking detail that went into production, possibly because of the excellent components or ingredients used, possibly because of a long term guaranty, or unusually high service.

Whatever the reasons, they are why you must separate your product and service from your competition and you must follow through and hold your price.

Many times the customer has no idea what the competition is selling for, but you discount anyways…why? I dunno, ‘it felt right,  he asked so I gave it to him’. Many times one discounts without any reason at all.

Worse, if you do discount at will, for no particular reason, your reputation for this will remain with each buyer you do this with and will spread by word of mouth…not a good idea.

If your potential customer wants lower quality, less service, less guaranty, all reflected in a lower price, then give them the names of your inferior competitors. But if they want the real deal, the best there is, the best service, this is the place, this is the company and  this is the price. Value added selling. Try it, it makes sense and it works, not for all, but for most.

Be prepared to lose a few sales, and that’s okay, as the rest will make up for it. Your prices will become respected as your client pool will understand your requirements. Also, when you have a sale the attraction will be huge and the revenue much better then if you discounted every other day or sale or at the whim of the salesperson.

In fact, even if you sell less, isn’t it net revenue you want rather than gross revenue?  If you sell less but make more isn’t that better then selling more and making less?

It is called business integrity and higher profits.  Understand value added selling and it all makes sense.

I have seen some business owners carry a policy of ten percent discount for friends, family and business associates. That’s it. So when sales people are confronted with the request for lower price, they have the answer and its affordable and controlled and usually requires a signature from someone so it is not abused and appears to be a real gift to the recipient.

Sometimes the boss is the worst violator, as discounting demonstrates his ownership, his power, his authority to do as he feels and it demonstrates his generosity kind of a statement that he is so successful he can afford to discount deeply to anyone he chooses for no particular reason other then his generosity. If only it were true as it really demonstrates his insecurity and ineffective business practices, and perhaps his generosity, but this must be controlled.

Remember that in the end business is not a hobby, it exists to make a profit  for the owners and support the employees and provide for their families.

Do the right thing, the responsible thing ..hold your price. A lot of people are counting on your making a profit and staying in business. Call me for help 413-549-2966.