The truth about offering discounts
Do you struggle with pricing your products and services?
Does it seem like clients only buy after you’ve discounted from your original price?
Are you perplexed by why your customers aren’t buying anything you’ve got to offer?
If so, you are not alone. Lots of first–time entrepreneurs have difficulty settling down on what to charge for their work.
Some entrepreneurs can’t seem to stick with a price: they decide on a number, but they toy with it, either by lowering it or by offering discount after discount just to get some sales action.
Discounts distort the truth about where your business really stands and over time, it also erodes an entrepreneur’s confidence. If you are Proctor & Gamble, discounting your line of laundry detergents may not make you feel less than about yourself. But if you are a solopreneur or a creator of your own stuff, frequent discounting chips away positive assurance and prevents customer validation.
Discounting may give you a temporary feeling of success by bringing in income, but after the initial elation passes, the truth remains that the sales came in through a bit of sacrifice. Do this enough times, and you’ll start to doubt whether you can ever charge for anything at full price.
Worse yet, when you discount, you are really just competing with yourself.
But if you don’t discount, it may mean that sales remain stagnant or dead.
What gives, you might ask?
Here’s the cold hard truth: if you find it difficult to convert sales, you don’t have a price problem. You have a communication problem.
To be a successful entrepreneur means that you must master the art and science of sales. Even though I am a designer, I spent most of my career in sales, and thus I have gotten pretty comfortable with negotiation and communicating value.
Today I’m going to pass on to you some of my personal experiences and perceptions, and teach you how to look at pricing from a more helpful point of view.
A communication problem
Here’s the good news: Pricing is almost never about the price.
Pricing is almost always about the value.
If you discount often and find that customers don’t buy until the price is reduced, then you’ve got to stop focusing on your price and start strengthening how you communicate your value.
Value is the customer’s perception of what she will receive in exchange for what she will pay. The keyword here is perception. Value is subjective to the individual’s perceptions. A $5,000 handbag to one person may have little value, while a $5 keychain may mean the world to that person.
Or, a student considering a $45 e–course might feel that the price is exorbitant, while a $495 e–book seems it could be totally worth it and more.
When it comes to marketing the value of our products and services, either we are in control of the conversation, or the value is automatically assigned to us by others.
As empowered, world–class female entrepreneurs, we’re going to always take the former approach by actively creating how our products and services are presented and perceived.
Before you even begin to think about the price for your products and services, first you must reflect deeply upon the value of your offering.
Here are some questions to ask yourself:
• What is the value that my customer is getting from this?
• Specifically, how does my product or service help or benefit the customer?
• Does my product or service have the ability to rock someone’s world or change someone’s life?
• With all honesty, is my product or service impeccably made and delivered with care and love?
• Do I stake my entire reputation on this product or service if my business depended on it?
By answering these questions honestly, fully and also publicly, you begin to communicate from a position of strength, rather than desperately begging for someone to buy.
When you are marketing your own stuff, sometimes it is difficult to see it with objectivity when the creation is so close to your heart. To gain clarity, get into the habit of stepping outside of yourself as the creator and then walking in your potential customer’s shoes. Read your sales page with their eyes and be honest with yourself — are you really doing a thorough job of saying what you need to say?
Get into the habit of speaking at length about what you do and why. Devote a ton of attention, time and space to help the customer truly get inside your head and heart, and help them get clear on where your product and service stands amongst the rest.
One of the things I will be teaching you in a later blog post is how to create a sales page that generates money. We’re not going to talk about web design specifics like how often the buy buttons should appear, in what size and color, and what should be above or below the fold. Rather, we’ll be concentrating on the essence of what an effective sales page is all about.
As you become crystal clear, you’ll start to understand the value of your own work from a higher place and exude captivating power when you speak about it. Rather than randomly selecting a price out of thin air, or being nonchalant or indifferent or careless about it, you can arrive upon it from a place of more thoughtfulness and certainty.
The more certain you are about your own value, the less prone you will be to throw up discounts all the time.
The perception of discounts is not very pretty, as you probably already know. Discounts give the impression of undesirability, lower value, lower quality, lower standards and the feeling that “something’s wrong with it”. My belief is that discounts are not needed if the entrepreneur masters the sales conversation and excels at communicating her value. The entrepreneur could discount because she wants to, not because she has to.
A confidence problem
What if you are very clear about the value you’re offering, but you don’t feel all that confident about charging a high(er) price?
One of the techniques I learned while playing blackjack in the casino (not that there is ever any winning strategy, in this case, mind you!) is to increase your bet after every winning hand while simultaneously taking in earnings. Gamblers catch hot streaks, so by using this strategy, you effectively win more money.
The relevant part about this technique is the “increase after every winning hand.” For example, say you decide to offer your coaching program at $250 for 3 sessions. It’s a number that feels attainable to you, and also makes you feel a wee bit excited. After a sale or two, you may decide to increase the price to $300 for the same amount of work. When more sales come through, you may decide it’s time to charge $500. And so on and so forth.
The point is that you step up from one price point to the next, one or several rungs at a time. By giving yourself the experience of having been paid this much before, you can now incrementally up your game and build it step by step.
I successfully built one of my businesses this way, and within the first 10 months, I charged 10 times the amount than I did when I first started. It also helped me create a 10–month 100% winning streak, meaning that I have closed every single sale in that period and counting.
Some entrepreneurs try to shoot for the gold the first time out. The result is that they feel anxiety over charging that much for something they’ve never gotten before. Discounts then become the quick fix solution to bring in sales through the door, but it is never a sustainable strategy in the long term. From an energetic perspective, discounts to me feel a bit like hobbling, not thriving.
Or, if your lack of confidence is due to not believing in your stuff, then you’ve got some more creative work to do. I say this with utmost compassion that plenty of entrepreneurs don’t take the necessary time, effort, energy and respect to create something truly valuable for their customers.
My honest advice is to give everything your all and don’t ever just throw something together. Don’t give yourself a confidence problem. Get super good at fully standing behind what you offer and don’t put out mediocre products and services.
Personally, I don’t have a particular opinion about whether one should or shouldn’t offer discounts. I look at business and entrepreneurship very objectively and rationally, and I don’t believe in rules. One set of standards can put a company out of business, while the same standards have created multi–billion dollar corporations. Some of the richest billionaires in this world have built their fortunes by both using coupons and by offering them.
The key though, is to be business conscious about why you are offering the discounts. Your honest response will tell you everything you need to know about how you feel about yourself and your business. It will tell you if course correction and fine–tuning is in order.
If I don’t discount, then what shall I do?
Rather than discounting your products and services, find a way to tangibly increase the value of what you’re offering. Work on communicating your value. Or, stick with the price, but give more. Make your program richer in content, or make your service even more irresistible than it was before. Create added value by bundling a relevant product or service. Whatever you add, add something of quality and of value. Don’t just throw in a menu of irrelevant items to make it appear fuller or more abundant.
Once you’ve increased the value, try it out in the marketplace. Get some sales in through the door. Then, increase your price and the value you’re offering again. Do this until you’ve reached a place where you feel abundantly joyful about where you’re at.
Hi, I’m Ana Coeur
I teach entrepreneurs how to create their business straight from their soul. I offer a complete Intuitive Business Suite to help you create, design, write and sell all from your intuition. Here’s the services you can take advantage of to empower your business: Intuitive Web & Brand Design, Intuitive Copywriting and Intuitive Selling. If there’s anything I can help you with, I would love to hear about it! You may email me at anaintuitivepicture.com
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