Why Offering Discounts May Not Be A Good Idea to Grow Your Business

By Jennifer Ellis-Jackson

Simple Mantra Marketing LLC

Everyone loves and looks forward to a great deal. Many of us enjoy coupons; receiving an additional percentage off on a purchase or a having a discount code before we make an online purchase. We enjoy free shipping, Buy One, Get One Free offers and let’s face it—anything that says or implies we are saving money and getting a good price.

What Motivates Consumers

Some of us only shop during sales—One Day Sales, Back To School Sales, Black Friday, Cyber Monday, and the list goes on and on. We experience sales at a variety of venues—brick and mortar stores, online stores, direct sales, etc. We negotiate prices and inquiry about discounts during various sales transactions to ensure we are receiving a good deal. There is a sense of pride when we believe we struck a deal that will benefit us. However, discounts, sales and price reductions can often suggest the product or service was not properly priced from the onset.

Pricing Considerations

As business owners, we place a monetary value on the products and services we offer. Careful consideration goes into our pricing decisions using a variety of variables including customer service, industry expertise, marketing, sales, systems, suppliers, etc. Many of us are questioned and challenged about our prices often because our customers and prospective customers are seeking a deal.

What message are we sending when we discount our prices? Are we sending a message at all? Discounts can allow us to drive short-term traffic, reach more potential clients and spike sales and engagement. The flip side to offering discounts are less profits, risk of being positioned as a value brand and enticing customers who only shop on a deal.

Offering Value

Instead of offering discounts, we could consider providing more value like offering complimentary products or services, bonus offers or special features for upcoming product or service launches.

For a new business, it is critical to establish your brand, offering and expertise in your industry. Once you have a firm customer base, community and credibility, seek a variety of ways that may includes discounts to drive your business. Try not to get caught in the spiral of offering discounts without establishing your true value in the your industry.