Provide Value or Give Discount?

Far to often we see small businesses giving away their profit and margin by using discounting to win the sales.

By negotiating on price – giving a discount – you will find yourself very quickly in the commodity sector of product or service sales. Not a great position to be in as you are now competing with every one of those competitors who sell the same widget as you.

More important, deep discounts devalue a product or service, limiting companies’ ability to raise prices . If people get used to paying $10 for a large pizza with lots of toppings, it’s hard to restore a price of, say, $16.99 when demand picks back up.

A great alternative is to add value rather than give discounts. This requires you to have 3 versions of price sensitive product A; the first is the downsell – Product A without X, Y or Z and the upsell: Product A with an extra value item that only adds a small amount to the investment but provides extreme value.

One needs to work on scripts to use in each situation, rehearse them and be convinced that they are GREAT value to the consumer. Write them down!!

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