Do you give discounts to new clients and customers?
If you answered yes, you need to read this article. I don’t give discounts, and I have very valid reasons for it.
I know what you’re thinking.
Discounts are good, right?
I love a good discount. If I see a game that I want with 50% off, you know I’m going to buy it! It’s the same with a pair of trainers. If I see a pair of £120 kicks for £60, they’re going in my basket!
So, why am I saying, “Don’t give discounts” when it comes to you and your business?
If you run a gym, a restaurant, a dental practice, a home improvement company, a barber shop or anything that isn’t a shop, then discounts could be harming your business.
In fact, I strongly advise all of my clients against running campaigns that offer discounts for the reasons we’re going to look at today.
In this article, we’re going to discover how discounts can damage your business, and what you should do instead.
“Don’t Give Discounts!?”
BUT We All Love Discounts!
Nothing is more persuasive than seeing a nice, big ‘SALE – UP TO 70% OFF’ sign in a shop. And it usually works.
But did you know that these sales are usually the last point of desperation?
Shops run sales because they need to clear out old stock to make room for new stock. If they don’t sell the clothes, they get thrown out.
When’s the other time clothes go on sale?
When they’re damaged and the inherent value is lower.
It’s the same when you go to the discount section in ASDA or Tesco. The food that’s in the clearance area is usually going out of date that day or damaged.
“Okay, I hear you. Food and clothes go on sale. But there are other things that go on sale and still make money!”
Let’s look at another example then:
How about cheap holidays?
You can get a really cheap holiday with flights and hotel included if you book last minute and off season. In my last year at university, me and a mate got return flights to Tenerife and 6 days in a hotel for £300-400 each. Not bad for a week in the sun in November.
Do you see the pattern here?
Discounts are used as a sales strategy in four main situations:
- When stock/units need to be sold because there is a time limit – food going out of date, out of season clothes, a flight needs to sell seats before the date.
- When the intrinsic value of something is lower than what it usually is (like the damaged clothing).
- To test or presell a new product or service.
- As part of a bigger sales funnel where the front end product is designed to cover the costs of advertising while the main money is made on the back end.
For a business such as yours where you deliver a service, you lower the value of your service when you offer discounts.
This is the same in restaurants, gyms, dentists, and everything in between:
If you offer a discount, people see that discounted price as the ‘true’ price.
This has several implications.
What Are the Implications of Discounts?
By offering discounts, it may look good to see the initial boost in your sales, but something quite harmful is happening.
Let’s list them the specific reasons why I’m saying, “don’t give discounts”.
1. People see your service as worth less than what it is.
The first reason why I say you shouldn’t give discounts is quite relevant to restaurants.
If you have a restaurant and you offer 50% off food every Monday, what happens?
Mondays are probably really busy. But what about the rest of the week?
You might find that you get fewer diners on the other days of the week.
So what do you do?
You offer discounts through other means on the other days to encourage diners to come in on other days.
While this will work to get more diners, you’re building your business on discounts, and people will see your food as being worth less than it is.
2. You’ll attract the wrong type of people.
If you offer a service like home improvements, I’m sure you’ll understand this one.
Imagine you run a landscaping business where you tidy up people’s gardens, and you’re trying to land a new client who seems quite interested. You have a call with them and set up a free quote where you go around to their house to measure up and give them a quote.
Everything seems to go well, until it comes time to book the work in.
At that time, the client starts “umm’ing” and “ahh’ing”, and they say that they are really interested, but it’s just too expensive right now.
At this point, most people will start discounting the price of the job.
After a bit of negotiation, you settle on a price and book the work in.
Fast forward a few months, and the job is long behind you, but the client keeps calling you with problems and issues. And it soon turns out the client wasn’t worth the hassle.
I’m not saying that this is always the case, but discounts can attract the wrong type of client.
I’m talking about the type of client who always has issues… or wants extra work doing for free… or doesn’t respect your time.
And that’s another reason why I say “don’t give discounts”.
You get the point – discounts can attract the type of client who wouldn’t normally value what you do enough to invest in it.
3. Discounts piss off your current members.
I’m sure you’ve experienced this.
You’re sitting at home watching the TV, and you see an advert for a new TV package with broadband.
On the advert they offer new customers an amazing deal: 18 months of extra TV channels and high-speed broadband for just £20 a month!
The same exact package that you currently pay £40 a month for.
How do you feel?
That’s exactly how your current members feel when you start giving new members big discounts.
It’s actually worse when you see and deal with your customers on a daily basis and not through a call center because you will have to explain to them why new members get the discount and the old members don’t.
This hassle alone is one reason why I suggest you don’t give discounts.
In this case, discounts can have a knock-on effect which damages the community that you have built in your business.
So, What can you do?
Don’t Give Discounts; Add Value.
One of the best things you can do is add value to your offer. This makes people feel better about the service they’re getting AND it puts you in a good light.
Rather than thinking, “I got a really good deal by getting 50% off”, your clients and customers will think, “Wow, [your company] is great. I can’t believe they gave me this stuff when I joined.”
Gyms do this with welcome packs where they give away water bottles and towels, but it can also work with other promotions.
Let’s brainstorm a few here.
Getting New Clients For Gyms Without Discounts
Rather than offering new clients discounts where they save money, you can offer them free trials.
This does two things:
One – it allows people to test your gym and see if it fits them, and
Two – it gives people the opportunity to become a part of your gym’s community.
It also doesn’t annoy your current members because they understand why you run free trials.
Now, I know that many gyms offer free trials, so I would recommend making your offer stand out by offering extra PT sessions, guided classes, full access to everything or even an extended free trial.
When signing up a new client, you can add value by giving them a bunch of PT sessions or coupons for free protein shakes.
You’re adding value, not taking stuff away. You don’t need to give discounts to wow your customers.
Getting More Diners For Restaurants Without Discounts
I know it’s really tempting to copy what big restaurant chains do by offering a single day or two where diners get BIG % off their bill, but you’ll probably see a dip in business on the days that the offer doesn’t run.
That, or you’ll have to run more offers, effectively making your food permanently cheaper.
Instead, you can run weekly or monthly offers where people get something free with a coupon.
For example, a free sharing dessert with two mains.
You know who would love that, right?
Couples on dates.
And you know what else couples on dates do right?
(No… not that…) They order alcohol!
Run that promotion (order two main meals and get a free sharing dessert) for a month, and let me know what happens.
Offering freebies with an order does a few things.
One – it encourages people to come because they see the value in getting something extra.
Two – it gives people a chance to try something they wouldn’t normally try.
Three – it gives you a chance to try out new products and get feedback on it.
Getting More Dental Patients Without Offering Discounts
Dentists are notorious for being scary and expensive essentials for many people in the UK.
Aside from being afraid of the drills and other dental tools you use, people are also scared of the prices.
So, what can you do to attract new patients to your practice?
Remove the stigma and worry of being charged a lot of money and not being able to pay it.
There are a couple of ways to do this, and it really depends on who you’re targeting.
So, let’s look at two examples:
Someone who needs dental work
This person is looking for a dental practice – they’ll look at reviews and location, but if you can grab their attention with a nice offer of a free consult and a payment plan.
This takes the risk out of money up front for them and sets you up for a new client that you may not have had before.
Someone who knows they need to have a check up
Probably unsurprisingly, most adults are due a check-up.
And these people are very rarely searching on Google for a dentist to go for a check-up.
So how do you reach them? Yup – Facebook.
Offering these people a free check-up and clean OR a package of check-up, clean and scan can get a lot of new patients through the door and onto your books.
Getting More Customers For Your Home Improvement Business Without Discounts
People who are ready for your services will most likely find you from referrals or a Google search.
But how about the people who need your services but aren’t actively looking?
These people are all lurking on Facebook, and there are a few ways to grab their attention and move them to book an appointment with you.
My favourite way is to offer something that you already probably do:
A Free consultancy call and quote.
If you have a financing option (such as 0% finance) or a free aftercare plan for X number of months, then you have some added bonuses that will drive even more people to contact you.
Down With Discounts!
(Did I really just use a Pikachu gif? Yes, I did)
There you have it – the case for adding value rather than discounting your services.
By adding value – and even adding free parts to your service – helps your clients and customers to benefit and appreciate your business more, especially if the things you offer for free have real monetary value.
For example, we don’t give discounts in our online marketing services, but we do offer several bonuses, such as a free initial strategy call, email marketing set up (including your initial email sequence written for you) and a website audit.
Hopefully the examples we’ve covered have got your creative juices flowing and new offer ideas bubbling.
If you’re thinking of ways to get your offers and ideas out into the wild, then hit us up. Schedule a free call with us by clicking the button below and we can show you how we use Facebook to get you more clients, customers and patients through cleverly constructed campaigns.