I’m going to start this week’s post with a short personal story.
This year, one of my best friends got married. I was in her wedding and was supporting her in every way that I could. She wanted to have gifts for the parents designed. When we started talking numbers and she asked for the friends and family discount. I love this chick. She’s like my sister but I told her point blank what my prices were. To make a long story short I caved, but she wound up paying me what I asked for in the first place. It kind of made me feel legit instead of like I had done her a favor and I got to process it in my business, which also made me feel like I was running a business, not charging for a hobby.
Moral of this story: The friends and family discount sucks. Discounts suck in general. And I’m willing to share why with you.
Discounts and Why They Blow
The formal definition of a discount is as follows.
A deduction from the usual cost of something, typically given for prompt or advance payment or to a special category of buyers.
But we don’t think of discounts like this. We live in an age where a discount is something that we are always looking for and come in many shapes and sizes.
- Coupon codes
- Percentages off
- Dollar amounts off
So generally speaking, there are two kinds of discounts. The first is the kind that we are all familiar with. Sales, coupons, they all detract from your bottom line. The second is an incentive of some kind like pre ordering a product before the price is raised to a a regular price that it will be sold at.
The really sucky part about discounts is the damage it can do to not just the bottom line, but to your overall brand. Think of it this way.
You have spent the time and energy positioning yourself as an expert in your market. You have spent the time to build an audience of people who want what you have to offer. Why short change yourself? In short, here are five, mostly no woo-woo, reasons to not give them.
- You are worth what you are charging
- You may be undervaluing your industry
- You are setting an expectation with your customer
- You may be cheapening your products or services
- You’re manifesting from a place of scarcity
It’s a complex issue. And it’s pretty in depth.
Here’s When Discounts Don’t Suck
“But you just said discounts suck.”
You’re right. I did. When you are throwing sales like confetti and giving out coupon codes like Old Navy, discounts suck.
Chances are, you are not on Old Navy’s scale. And that’s ok. If a semi annual sale helps you take from Thanksgiving to New Year's Day off, you better be doing that sale! But here the catch. There are certain discounts that, while not ideal because I don’t like discounts in general, that are great to give, like in the scenarios below.
Early Adoption: For my first five clients (the people who really help get my business off the ground) I offer a grandfathered rate discount for future work I do for them. This is a way for me to say thank you to these early adopters who have supported me from the very beginning.
Pre Order Incentives: I’m launching an e-course. This course at regular price when it launches is going to be $299.00. But the people who pre order the e-course will be offered the price of $199.00. That’s a one hundred dollar difference! That takes your course from out the budget to in the budget, it’s a damn good deal, and it’s for a limited time.
Loyalty Discounts: Sara has been on my email list since the beginning, engaging, supporting and going after every bit of content I’ve produced. She was one of the first. Joanna was on my list for the last week, has not engaged with me and is well, a n00b. And that’s ok. So when I segment my list, I break it down by date and send out a stupid good deal, I’m only going to send it to the people that have been on my list for over a year and that means that Joanna won’t get it this time around. But if she hangs in there with me, she will next year.
Upfront Payment: Payment plans can be an absolute god send when you are first starting out. Making your payment plans add up to be more than a lump sum payment would be is a total win for everyone. First, if I have to wait three months to get the total amount out of you, I’m going to charge you extra for making me wait. But if you are not capable of paying upfront, paying an additional 2% does not break the bank and provides flexibility. Paying upfront should be rewarded because there is no hold up.
A Message to Discount Givers
Let me start by saying I love you and I’m doing this because I love you.
Cut your shit.
You are worth what you are charging. You need to respect yourself and your business and don’t you forget that you are a badass business owner who does something truly incredible and you should be compensated accordingly.
Are the discounts going to get you to your crazy big fat goals? No? Then drop them like a hot rock. And don’t look back.
A Message to People Asking for Discounts
It’s not your fault. Well not all your fault.
We live in a society that has conditioned us to want more for less faster. Remember when you are working with a small business, they do not have the resources that a place like Target or Amazon has. It’s difficult to get by as any small business. Remember that their success hinges on getting customers that value their products and understand that something that is produced in a small business is something that takes time and energy of either an individual or a very small team of people.
Give small business owners some grace and remember that you are supporting them by respecting their pricing as they list it.
A Message for Family and Friends Asking for Discounts
I’ll try to keep this as nice as possible.
You are supposed to be the support system of the small business owner in your life. Part of the responsibility of that is not taking advantage because of a relationship that you have with that person. If you need a product or service from your small business lovely, then you should expect to pay what anyone else is. Supporting your friend or family member is not just about listening to them gripe when they need to or happy dancing with them through successes. It is about respecting their business as what it is. A business. And understanding that by asking for special privileges, you are disrespecting their client base, undervaluing their skills and knowledge, and whether you know it or not, not being supportive.
Let’s Wrap It Up
I’m not going to lie. The topic of discounts gets me hostile. But if you’ve made it this far, you already saw that. It’s not that I am opposed to rewarding loyalty or being smart by offering in budget pre sales, but you and I are not Target.
This post turned out a little bitchier than I thought it was going to, but I think that just speaks to my passion on the subject.
What do you think of discounts? Do they get you hostile? Think I’m being a self-righteous a-hole? Comment below and let me know what you think!
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