Discounting is for not soo smart businesses. If you’re thinking of running a sale or a discount…wait watch this full video first! Yes, a discount can create a HUGE spike in sales, increase cashflow and topline.
Yes, that huge spike in top-line can be tantalizing (especially since everyone and half of their competitors are running a discount right now). But, today, you’ll see why discounting can DESTROY your business.
👩💼 Let me tell you something….most of the business owners either wing their pricing strategy or take it from their competitors or local market without putting alot of thought behind it. 🤳
I met a photographer and videographer month or so ago and he said Ali I am not booked for this coming year for the weddings and I think I should lower my price to get my team busy. Usually they are booked 6 to 8 or even 12 months in advance I told him thats the worst thing he can do to his business….I gave him a suggestion….watch the video to find out!
2 Core principles for pricing your services!! Firstly, not be the cheapest one in the market. – Go and watch our video on Payless Shoes on why it went bankrupt altought price aligned really well with the value they provided.
Secondly, never ever….ever…ever…ever!! Discount! But before I tell you why…Watch the example of JC Penny in our video which talks about how discounting actually almost took this company out of business.
Because they build their brands on coupons, deals and luring customers with mega discounts….now they are struggling to build a perception. So, if you are smart you should also hate discounting!! Can discount increase sales….oh yes definitely! But long term is damages your brand immensely. It’s like a drug you and your customers are addicted to it. Sales not only make customers question the retailer’s motivation, but also train them to look for ways to game the system. For instance if customers realize you have consistently poor forecasting and always end the season with a clearance, they will just wait until the end of the season. It’s reasonable for customers to expect the best deal possible, but discounting creates a variety of problems for the solution provider. Ultimately, these problems can impact profit margin, customer satisfaction, and your reputation so severely they may threaten your business. Here on Reddit people are complaining about the pricing of Mcdonalds….Now funny thing is they are not only complaining about the pricing but also quality. Things like whats in their fish fillet and chicken nuggets…. Going back to the start of the video where I told you about a photographer and videographer who was talking about discounting, here is how we solved this problem. He actually introduce 5 packages in total, in-fact he increased his pricing and before he was offering he was offering his service for 3000$ flat price, in new pricing chart goes from 15k to lowest 4k. What started happening over next 2 months is he started booking weddings at 6k per project, his project fees doubled and how he can just do 50% of the work to make same money where he would be delivering twice the work for same price. **Basecamp is a good example on how to move away people from cheapest option they have premium options.
Mcdonalds is doing it they are introducing more expensive burgers in their menu to move customers from away from the value menu. Focus on adding value and building a narrative/perception in your customers mind that your service or product is about experience, trust and quality.
Ali Salman is an online marketing strategist who have worked with Coca-Cola, Extreme Pita, Mucho Burrito, KIA, Honda and other Fortune 500 companies. Ali Salman now heads Rapid Boost Marketing - Canada's fastest growing search marketing agency. RBM clients include Fortune 500's and medium size businesses across North America. Ali as RBM CMO leads his team in building and managing quality, high-performing and cost-effective interactive campaigns and programs for our company's customers and partners. In his career, he has significantly improved campaign performance for large brands such as Government of Alberta, Liberal Party, Workopolis, Cathay Pacific, as well as medium to large retailers and high-tech B2B-enterprise niches.
Ali and his team develop online promotional concepts that spark viral growth through search and social media for RBM clients, devising strategies that use search engines and more to reach key demographic segments in the ways they're most likely to be receptive. Ali Salman also oversees corporate marketing initiatives for Rapid Boost Marketing, including strategic communications counsel, public and analyst relations and client education programming.