When to Offer a Discount

We live in a world of discounters. Long before Sam Walton sprung on the scene and gave us Wal-Mart, there were the occasional 'dollar stores', KMart and even old line chains like TG&Y. The mindset of the consumer was more focused on quality than on getting it cheaper.

Now it seems if you throw a rock you hit a discounter.

In this day of "I can get it cheaper at Wal-Mart", how do we continue to do an excellent job for our clients AND maintain enough profit margin to stay in business? Can we position ourselves in such a way that we don't have to fight the price battle every day? Can we run a legitimate sale without angering customers when the sale ends?

Yes, we can. Today I will share five quick ways to do just that.

1. Know Yourself

The first step is to decide what you will stand for. Are you a discounter? If so, that's OK. Do you provide a value added service and *never* offer a discount? That's OK too.

The real bottom line is to be consistent. Think through and decide how you want to be perceived by your clients. Once you have done that, review your marketing and client materials to ensure that they don't undermine the position you have chosen.

2. Know Your Bottom Line

If you are going to give discounts, you must know how this will effect your bottom line. Sales volume, as expressed in units, makes all the difference here.

A friend of mine just completed a review of his business. He discovered that by raising his price slightly, from $35 to $39.99, he would earn an additional $90,000 a year! When he changed the price sales weren't affected at all! Now he wonders why he didn't do this two years ago.

Take a close look at your business. How many 'units' do you sell? Are your profit margins high enough to survive offering a discount? Will the market you work in respond to a discount? Do you offer so much value added service that you could actually raise prices?

These questions and more will hold the key to how well you can maintain the position you chose in step 1.

The goal must be win-win. As sellers, the more we want our clients to win (with excellent customer service, great pricing, relevant products, etc.) the more we will win.

3. Know Your Market

This is marketing 101. In fact, (shameless plug) there is no tool in the world that will help you find your perfect market faster than the Directory of Ezines. That's what we're all about ;)

You MUST know your audience in order to define your position properly. If you deal with corporate types, they will often expect a discount for quantity. Individuals often work on a limited budget. Some prospects will try to 'play' you off a competitor simply to see how low you will go.

Without regard to which market you work with, the key is to know that market. What is the usual pricing structure? Do they ask for or expect discounts? Do they recognize the value of value-added service? The more you know about THEIR motivation, the more you can align your position with them.

4. Know Your Policies

Do you have an established policy for sales and discounts? Many of us are so hungry for the next order that we just do whatever it takes. On a practical level that is understandable. To build a business, however, you need policies.

If you have (or create) a clear policy on discounts and sales you can make the POLICY the bad guy when it comes time to say 'no'. Even though you own the business and call the shots, having a policy that is on your web site, and on paper too, insulates you from having to decide on the fly. This alone creates a time freedom you can use to go get more clients. And that's a Good Thing!

5. Know The Dangers

VERY IMPORTANT. There are dangers if you always discount. No matter if you call it a 'website visitors special' or an 'ezine reader only offer' or call it March Madness, *continuously* offering a discount is dangerous.

For example, we offer a weekly special to subscribers of the Directory of Ezines. I'm sure you have received these offers, and many of you have taken advantage of them. (Thank you!) We work hard to find the tools that will help you, then offer you a super price. This is our policy. We don't discount these products every day ... we offer limited time specials. Our faithful readers know that and don't ask for the low price once the sale is over. A classic win-win.

Here is the reason offering an everyday discount can be dangerous to your bottom line.

When you offer one discount after another to entice people to buy you are *conditioning* them to expect a discount every time. What this causes is a situation where people will WAIT until your next sale or discount comes along before they buy. They won't tell you, they will just wait.

To avoid this danger, pay very careful attention to steps 1 -4. ;)

Once you know your position, your bottom line, your market's preferences, have established your policies and have avoided the dangers of continuous sales, you will put time on your side. After that, when you DO run a sale the response should be huge.

Article Source: http://www.realworldtactics.com/articledirectory

Charlie Page is a copywriter who owns the Directory of Ezines and the Directory of Marketing. If you want to sell more online, visit Charlie today at www.directoryofmarketing.com

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