5 reasons why you shouldn’t discount your service
Bespoke services generally have negotiable prices. As a learning and development company who deliver bespoke talent development and leadership development courses, we sometimes have to be flexible with what we charge. Especially in today’s climate.
Internet shopping – which has allowed for products to be sold at a fraction of the price in store – and the rise of daily discount sites like Groupon – mean that people no longer expect to pay full price for anything. Everybody wants – and feels they deserve – a bargain.
So it is widely thought that dropping your price will boost sales but at what point does dropping your price have a negative impact on your business?
Here are five reasons why it is a bad idea:
You devalue your brand
While discounted prices might be good for short term sales – it does nothing for a customer’s perception of the brand. If you’re marketing yourself as being cheap people won’t believe that your product is of great quality. Customers will also believe that if you are able to give great discounts, prices must have been inappropriately high in the first place.
You devalue your associates
We work with a world class team of facilitators and motivational speakers. They are the best at what they do and each is successful in their own right. By discounting our prices not only do we devalue our brand but we devalue our facilitators’ reputations as well – in fact we devalue anyone that we are associated with.
You open yourself up to a price war
When one company discounts their price others feel they have to follow suit to compete. This ends in a price war of ever decreasing prices. It’s just not sustainable – something will eventually have to give…
You compromise quality
Companies off shoring services or cutting corners in order to pass the savings on to their customers inevitably create a worse experience for their customers. This results in very little repeat business and a bad reputation.
Your client/supplier relationship suffers
If you’ve been hammered on price the relationship isn’t off to a great start. Your client isn’t respecting you and the value that you offer and you feel resentful about taking a financial hit. And in the long run, the relationship will suffer – it just isn’t possible to have a successful relationship without trust and respect in any part of life, so why should your client/supplier relationship be any different?
So while it is tempting to drop prices to bring in the sales – it’s important to think about the long term effects. Perhaps keep this motto in mind:
By Emma Webb