Tag: discounts

You spend ages working out the right prices for your business and then somebody asks for a discount!

Before saying yes you need to work out what you get in return. If it’s a discount simply for signing the contract or buying your goods then there is no additional benefit to you.

If they’re buying in bulk then you need to decide whether this will benefit you in the long term. Will they buy more overall or is it just a cashflow benefit? Perhaps they’ll ask for a discount in return for earlier payment which could be useful if you’re short of cash but interest rates are generally fairly low at the moment.

The trouble with discounts is that they become the norm. The individual customer expects them every time and it is hard to increase your prices. You also get into a habit of agreeing to discounts and gradually erode all your careful pricing.

There are very few exceptions when it is appropriate to discount and so you need to be clear what’s in it for you and what you will get in return. Work out your prices and stick to them.

(We discuss pricing more on each of our courses as it is key to a profitable and sustainable business)