The Money Podcast Giving Discounts: The True 'Cost'
The customer isn’t always right and offering discounts come with disadvantages in both the short and long-term perception or your business. In today’s episode, Rob talks about pricing your product or service accordingly and the effects it can have on your business when you price correctly for your marketplace. Tune in today to hear why exchanging products and services at a fair price will have a positive effect on your business.
KEY TAKEAWAYS
- The potential cost of giving big discounts to your customers or even giving some things away for free is that when you give too much away or too bigger discounts or your prices are too low, you can often attract the wrong kind of clients.
- Don’t discount and have really low prices to attract the Kindle kind of buyers into your business who won't find value in your product but will just consume your overhead for nothing. It's a sweet kind of business because there will be some cash flow but I would not advise anyone to give big discounts because there will be no much of a profit margin. If you sell products and services, you want those customers to go to the high volume, low margin providers.
- What you should do. Think about the positioning of who you're trying to attract and price accordingly, up your prices probably. If you’re a coach or consultant and you're giving a lot of free advice, and you're helping a lot of people and you're feeling a bit resentful, you've got to put your prices up, you've got to put a price wall in the way to test the seriousness of your audience.
- When you sell your products or even books at a discounted price, people are expecting when they read that book to be made a millionaire overnight or for it to be amazing or perfect and as soon as the slightest thing isn't right for them, they're going to go and leave a massive one-star review about your product and complain about it. They're the probably the kind of people that are cheating, trying to get everything for free, trying to screw over providers, they just want to go and bitch and moan about everything.
- You should even up your prices by 20%, and it's not going to affect your business in any way, you're going to attract better clients who have more money, who are the right type in the right niche for you, you're going to have higher margin, therefore, you've got more money to reinvest into better products and services.
- You should never give discounts to products that a fee is attached to because it would not be fair for people who had already bought it at the original price before the discount, some of those customers that had bought it that way may come back to you with a lot of complaints and you may end up losing a lot of money.
BEST MOMENTS
- “I don't want to save everyone, I don't want to help everyone and I only want to help people who want to help themselves.”
- “Pricing in business is a perception.”
- “When they pay for something at a fair price, they see the value because the value is a perception as much as it is a reality.”
- “Stuff that should have a big fee attached to it should have a big fee attached to it and it shouldn't ever be discounted.”
- “I don't think we're in an age where the customer is always right.”
VALUABLE RESOURCES
ABOUT THE HOST
Rob Moore is the author of 9 business books, 5 UK bestsellers, holds 3 world records for public speaking, entrepreneur, property investor, and property educator. Author of global bestseller “Life Leverage” Host of UK’s No.1 business podcast “The Disruptive Entrepreneur”
“If you don't risk anything, you risk everything”
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