Why I Don't Give Discounts for Service

In my recent post on “Why I Don’t Do Work for Free,” I mentioned that giving your service away for free creates an assumption on the part of the client that whatever you’re offering is not really worth that much. Well, today, I’d like to assert that the same goes for discounts!

First, lemme just start my saying, I’m not opposed to discounts when it comes to retail. I mean, who doesn’t like a bargain? When I’m shopping, if I can find my favorite brands on sale, I’m so stoked! And I have to say, I think I’m a pretty masterful bargain hunter. But when I find my favorite brand name boots on sale for 30, 40, or 50% off retail, it trains me quickly to think that I really should never have to pay retail.

Now, there are certain things that I’m absolutely willing to pay full price for. Typically, those are items that are hand-crafted, of exceptional quality, or that have an amazing story behind them – or ideally all three. (Like the FEED bag I bought recently, after a frustrating experience returning a brand name leather purse that I bought on sale and that immediately started to fray and fall apart.) And this is also the way I want my clients to feel about my business and the service that I offer: it’s highly customized to their particular needs, it’s extremely high quality, and the outcomes leave them forever changed, in a good way!

So, when I hear my colleagues in consulting, advising, or coaching talking about lowering their prices for first-time clients, or for initial phases of projects, with the hope that they will be able to raise their prices with these same clients after the client has experienced the work and bought in more fully, I get so frustrated!

Here are three basic reasons NOT to discount your services:

1.     It’ll be much more difficult to raise prices later.

The minute you lower your prices, the customer will expect that same price the next round. And they may not purchase again until you offer another special discount. If your customers/clients talk to one another, word might get out that you gave a special price to one that you didn’t give to the other and now everybody expects a discount (or worse, has a feeling that they’re not getting a fair deal.) Despite your best intentions, it’s the customer’s perception of your fairness in pricing that counts.

2.     It shows a lack of confidence.

If you are new, it may be that you are not fully confident in what you are selling. That’s valid. But offering a discount right off the bat just screams out to the customer that you don’t believe enough in what you are offering to charge the regular price. As soon as they smell that lack of confidence, your sale is likely lost. Or in the best scenario, their confidence in you is lowered based on their perception of your lack of confidence.

3.     True pricing is better for reaching your true target market!

Price shouldn’t even be an issue if you know your audience well and you’ve truly spoken to your client’s pain points and goals. Don’t offer to do it for less money because you feel bad for them! First, that is putting judgement on them. Second, if your client is interested and truly needs what you’re offering, they get to decide whether they can afford it or not, not you. If it’s truly worth it to them, they will say yes. If not, or if they decide they truly can’t afford it, good. Because if they say yes, but they’re not fully bought in, you’re going to have a much harder time getting the results with them that will make for a successful project or they may feel resentful. And that’s no good for anyone.

In the end, it’s really hard to run a successful business. If it weren’t, everyone would be doing it! When you have to sell a lot more to make your monthly nut, you’re only making things harder on yourself. So, please don't negotiate. Don't discount yourself. Just offer the true price that covers what your service is really worth. You'll thank yourself later. Having trouble figuring out that price? Maybe we should talk about that soon, too!

 

Are there other examples you’ve encountered of when it might or might not make sense to offer a discount on a service you’ve offered? I’d love to hear about your experience – please share below!