Today I want to talk about when is the best time to give a discount?
Starting off I’m a huge Fan of NOT giving discounts to New customers,
I would rather sell the value proposition charge a little more and give them more, deliver more than they anticipate building that relationship with them so we can do business for a long time a real long time.Lie forever.
Let’s talk about psychology behind new customers and giving discounts and why I’m so opposed to giving that new customer a discount.
If you’re going to market your services weather by on Facebook or you do postcards or you know using A great tool Radius bomb and do postcards that way or even advertise in a local magazine.When you put in a discount to attract business. Then what you’re doing is attracting the people who are looking for this kind of services but at a discounted price.
And that’s OK if that’s what you want to be known for.
If it’s not then why do you want to attract people who are only looking for discounts?
I know you’re saying.
I’m going to turn that person into a regular long-term customer.
Well that is a nice thought but the majority of the time you don’t, because they’re always looking for a discount so they’re not going to build that relationship with you that you were hoping for buy enticing them with a discount.
Here’s another thing that happens to you is that the person referrers likeminded people. Who do you think they are going to refer to you, people looking for that discounted proposition.
Its like being on a hamster wheel.
They’re going to refer people who expect you to discount, the whiners and complainers for the most part.
Let’s say not all of them are whiners and complainers but they do have a tendency to complain and whine and expect that discount.
You know that’s what you’re attracting so really, These are the customers you are attracting.
It’s not your fault.
Wtih out realaizing it you have set in motion these events of attracting discounted business . It’s not your fault because you really never thought about the end results and what you were really doing.
I’ve been there, all you were looking at was getting more business, more revenue and hopefully more profit with the possibility of creating long tern relationships.
But this is what really happens because you attract that type of customer from the very beginning on selling them the discount proposition they are not looking to build a long-term relationship.
If you’re going to give a ten percent discount or you’re going to give a twenty-five-dollar discount that’s profit out of our Business.
How much business to you have to make up To replace that money you just gave away?
I know the thought process. Oh I’ll get it on the next time they do business with me. I’m telling you that for the most part they are not going to do business with you because they are discount shoppers.
My ultimate question is this why, do you want to put yourself through that trouble of discounting to get customers,when it ultimately causes pain and frustration in the long run?Because they are apt to whine and complain and referr like minded people.
You’re going to do this for two or three years or longer and you’re going to get fed up with the people that are complaining and whining and you’re going to smarten up and you are going to start moving to a value oriented customer base a new customer base. And you will slowly purge the customers that are discount shoppers.
When will I give a discount to a new customer it’s all done in the wording.
If I am giving a proposal for multiple services to be performed at the same time as, Pressure cleaning the drive, clean the pool deck, clean the lanai screen, clean the roof, wash the windows.
I will give a bundle discount if 3 or more items are cleaned than I will create a bundle discount.
I will give a discounts to my regular customers at certain times ,the key to that is when giving a discount there has to be a reason for doing the discount,
- Spring Cleaning
- Refer a friend you both get a special discount (good customers are referring likeminded people)
- An anniversary special could be yours, could be theirs,
- It’s one of your kid’s birthday let’s celebrate!
Use your imagination
Build a good customer base without using discounts.
Be known as the value guy giving them value for what they for which you what they paid for.
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