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Don’t rip yourself off!

I am sure you have seen companies who are always having a sale?

You know, cheap and nasty radio ads, spamming on social media, big flags and signs outside of their premises screeching SALE SALE SALE. Does it really make you want to go there? Or does it make you think that maybe they can’t really be trusted?

Would you ever buy something at full price at one of those places? (If they even actually have a full price that is).

What about some of the online shops that are around these days with the same product being sold by multiple vendors at different prices? Doesn’t that annoy you? If it is a commonly available item you are buying online, there is no real differential that justifies paying one vendor more is there?

Have you ever bought a new car, and you can’t get a straight answer on how much it costs? I don’t want to pay less only if I have time to compare prices, haggle a lot, and take someone to the new car dealership who “knows” what to do to get a better price. I just want the price to be the price. This new car costs this much. Accessories cost this much. End of story. How frustrating that someone else who caught the salesman when he was more desperate for a sale got a better price than you for exactly the same thing?

Last year I bought some Christmas gifts online from a boutique gift shop I have supported for many years. I love their stuff and have spent a lot of money there over time. When my order arrived, one of the items had a “sale” sticker on it and a cheaper price than I paid. I was extremely annoyed. Even though I had been prepared to pay the full price when I saw the item online, the fact that it was on sale and that was not passed on to me as a regular customer really got to me.

When you are running a business, it is common for people who are new to your business to ask for lower prices, try to negotiate or even haggle you on your prices. After all, if you don’t ask you don’t get, right?

But if you let that happen, what message does that send to your existing clients? We have all seen the banks offering cheaper interest rates on home loans to new clients. How rude! Loyal clients paying more than someone new. Clearly you are not valued at all.

I do not believe you should compete with price.

I believe you should value your existing and particularly long-term clients way more than someone trying to haggle with you. In most businesses it is more expensive to find a new client than to hold an existing one. And if you start discounting as your sales method your existing clients will lose trust and feel ripped off. Then you will need to find more new clients, or give existing clients discounts as well. It is a spiral to disaster.

Your value as a business is likely not exactly the same as someone else with a similar business. You should have confidence in your points of difference and the offer you have available. Whilst people can ask for a discount, you should politely explain that you don’t offer discounts as you offer value for money, and you do not wish to upset your existing customers.

You have loyal clients who you take care of well, and who keep coming back to you. You have priced your goods or services according to your business plan. You need to cover your costs and make a profit. Profit is not a dirty word, it is why you run a business in the first place. You have done your research on what others offer, and your pricing should be competitive, but it does not have to be the cheapest to be competitive.

And if you need new customers, you should be working all of the usual sources. Network, advertise appropriately, write helpful blogs, add value to clients, solve people’s problems for them with your business, ask your existing clients for referrals, get customer feedback and fix any issues, and more. Don’t be humble, make sure you know how good you are, and stick to your plan.

That person who you gave the discount to? It is likely they will keep asking. They won’t value you as much and will continue to try to get more discounts for other services. It won’t take long to regret getting that new client.

Of course there can be room for volume discounts or loyalty discounts, but they should be offered on your terms, not given to the person who harasses you the most. Another common strategy can be a new offer with terms that are held at a discount for the first x number of new clients. However this needs to genuinely something new and not a dodgy scam offer that is the same as existing clients are paying more for.

The main message here? If you rip off your loyal and existing customers you will end up being the one who is ripped off in the end.

Do your business plan, have contingency plans for disruptions, always have a buffer and know your worth. This will gain the trust of your clients and help your business. It pays off in the long run!

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