As a service-based business owner do find yourself offering your client a discount to influence them into investing in your program or package? Or do you cave in and offer a discount when your prospect asks for one?
If you have answered yes to either one of those situations you are certainly not alone. I admit that this is something that I’ve done in the past too. However over the years I’ve realised that this is not one of the best ways to make a sale, while remaining true to my personal values and business growth goals.
In this fortnight’s article I’ll be sharing 3 reasons why you shouldn’t resort to discounting your services and the 3 strategies you should implement so that clients step up gracefully and confidently when investing in your services, packages and programs.
1. Discounting devalues your services
Unfortunately whatever way you look at it, discounting your services does little other than to lessen the significance and worth of your program, as well as the benefits, outcomes and overall value your clients will receive through investing in you.
Unlike a product-based business that can mass produce their wares and offer discounts on bulk purchases, a service-based business owner cannot and should not offer bulk purchases discounts on their time. Your time is one of your most valuable assets, so don’t devalue this priceless commodity by discounting it.
Remember, your client does not pay you for the hours you spend with them, but for your knowledge and expertise, AND for the results and outcomes they will receive through working with you.
2.Discounting can impact negatively your self-belief
I don’t know about you – but in the past whenever I’ve reduced the prices on my services as the only way to have a client say ‘yes’ to my offer, that little voice inside my head said ‘See, the only way a client is going to invest in you is when you lower your prices,’ which is a self-belief I did NOT want to encourage.
Thank goodness I know now that my clients are investing in me because of my wealth of knowledge, my expertise and the results and outcomes they’ll generate through working with me.
By discounting your services as a last (or only) resort will not only continue to impact negatively on your self-belief and self-worth, but will also prevent you from building a thriving successful business.
3. Can establish a negative precedent
Offering discounts as a way to get clients into your programs can establish a disempowering precedent or business standard that will only serve to block you from achieving your income goals, because of the negative impact it can have on your self-worth and subsequently your income.
Do you want to continue to attract clients that will only work with you if you offer them a discount? Do you want to continue having to justify your value and worth to every client who asks you to reduce your prices?
Having these continued conversations because you have established this precedent will only serve to undermine you and your business’s growth.
Instead, here’s what you should do:
1. Create packages
A strong business model that will allow you to increase your income without having to increase the amount of time you spend with clients is to offer packages and programs that include other elements other than just your hourly services.
Offering value-added packages that will provide solutions and support for your clients will be far more exciting and empowering for them. It also continues to add value and credibility to the work you are doing with your clients.
For instance, in my Sapphires coaching program (which I’m launching next year) I will include coaching as part of the program, however this is only a small part of the package. My program will also include group mastermind coaching, weekly audio/video laser coaching strategy, online take action journal, access to webinar recordings, forums and opportunity to network with others in the group, so it will be value packed with lots of resources and goodies other than just my time.
So what could you add to your packages that will create value for your clients?
2. Add bonuses to make the offer irresistible
Bonuses and offering that extra special ‘gift’ to your clients for investing in you can make your program or package irresistible.
One of my colleagues was offering a program that was focused on time management for stressed business owners who were struggling to keep up with their hectic schedules.
One of the bonuses she included was a half-hour free massage from her colleague who was a massage therapist. The massage therapist was highly skilled in what she did and was also very good at sales and marketing so each person who had the free massage felt so wonderful that they signed up for additional massage sessions. A win-win-win situation.
My colleague was able to add a bonus to her package which she knew her clients would love and that fit perfectly with her topic; her clients would benefit greatly from having the massage; and the massage therapist had an opportunity to provide a hands-on experience of her service while on-selling that client into one of her massage packages.
So, what bonuses can you add to your packages to make them irresistible to clients?
3. Offer ‘quick decision’ offers
I’m a firm believer in focusing on the outcome you desire and creating positive and empowering environment and mindset.
So, rather than offering a discount (which lessens the value of your services) you can change the entire focus and energy by offering a ‘quick action’ saving when your client makes a quick decision and takes decisive action by booking into and paying for your program within a certain timeframe.
Doing this will reward your client’s ‘positive behaviour’ in taking decisive action and investing in themselves and the outcomes they want to generate. You are rewarding this quick action – and not rewarding their ability to get you to lower your fee. See the difference?
As I roll out my Sapphire and Diamond coaching programs (next year) you’ll see me offering these programs at various pricing points. The first group of people to sign up into these programs will be rewarded with ‘quick decision’ savings. This is because a business owner who has this attitude is one I know will be successful because they’re driven and ready to take action.
So how can you integrate this strategy into your marketing and launch calendar?
Remember, if your goal is to attract high quality clients then don’t resort to offering discounts but rather offer special packages/programs offerings; make your offer irresistible through bonuses; or offer ‘quick decision’ pricing to reward them for stepping up and investing in themselves.
Me, I love them all and will continue to integrate all three when marketing my programs. Which ones will you do?
Excellent tips, AnneMarrie.
I agree with you that service providers sell their time and so should pile up more value pack instead of discount rates. That is a widely practiced principle in consulting. Thanks for emphasizing it for online business owners selling their time.
Hi Stella, thanks for stopping by and commenting.
Discounting as the only way of making a sale can be so deflating. So, it’s time to do a big reframe, realize the benefits and value we offer, stand in our power with money and say “I AM WORTH IT!” 🙂
Then, start thinking about ways you can position your services through packages, offer quick sign up bonuses etc to get clients excited and ready to invest with a huge “YES!”.
One of my favorite sayings (I have many), is “You don’t get paid for the hour. You get paid for the VALUE you bring to the hour”.
If you have a new business that has been focused on discounting to drive in customers, but want to transition away from that and rather offer a technique, something that will add value to the service, versus a price cut…can this transition have a negative impact as well since that clientele that see’s discounts will not get that anymore. I ask because the clientele that you would currently have is a pricepoint driven one versus a service driven client. Make sense??? Any feedback is appreciated.
Hi Jennalee, this is a great question.
One of the most important things about changing your approach to discounting is the mindset and feeling YOU have around it. Typically, when someone offers a discount as the only way to get the sale, this can have a negative impact on the self esteem and belief that ‘they are worth it’, and that’s something that has to change. Because, if they don’t truly believe that their services are worth it and that they are offering real value to their clients, it’s going to be difficult to stand tall, charge what they’re worth and get it.
You mention that you are considering offering a technique – which I am assuming is going to be something of real value for the client. So you are changing your packages, which is a good thing, as you can begin to talk about this to your clients (through your newsletter). You may want to do this in stages and then really build up to the launch of this new technique (and of course your pricing structure), however if you showcase the benefits your clients will achieve and how this is going to allow you to help them in an even deeper way and focus on that, rather than the investment level they will now be paying.
Sure, some of your existing clients may just decide not to continue, however you will probably realise that these clients are not your ideal clients who truly value the support you are giving them. Many of your clients who are experiencing great value, I’m sure will continue to invest, and some, won’t even bat an eyelid. That’s what I have found from my experience.
Hope that helps!
Thanks Annemarie, this is very helpful!
Jennalee
Hi Jennalee, a pleasure! Feel free to keep in touch and let me know how it all goes. Also, feel free to stop on by our weekly ‘Get More Clients Booked’ sessions, starting next week. http://www.GetMoreClientsBooked.com
Best, Annemarie
Annemarie, I absolutely agree! You’re right on. Discounting prices does not create lasting, meaningful customer
relationships. It may get you a new bargain shopper every now and again.
But the fact is that bargain shoppers, such as the Groupon community
is, are not interested in you or your brand. They have no commitment to
the value you offer, the quality of your product or service, or the
experience you bring to the table. The only thing a bargain shopper
cares about is how much they can get for their dollar. And the moment
someone else offers the same thing for even two cents less, they’ll be
off like a summer’s breeze.
The key to a successful, long-term business with steady clients lies in defining your target market and then creating meaningful, lasting relationships with that audience. If “you” have been chasing bargain hunters, the only way you’re going to keep them happy is to keep lowering your price. Consider setting your focus on a more serious audience and create lasting, meaningful relationships with that audience.
It’s these relationships that will
sustain a business. If you are not creating lasting, meaningful
relationships with your IDEAL customers, don’t blame it on Groupon. Creating
those relationships takes a lot more work than it merely enticing
someone with a cheap price. It takes more than simply implementing a new
program, or jumping on social media. Long lasting, meaningful customer relationships are not built through advertising; they are created when you DESIGN YOUR BRAND AROUND YOUR IDEAL CUSTOMER.
Sorry, a little long, but I mean well! Hope this helps 🙂
Hi Kristine, thanks for your comments – very much appreciated.
When it comes to service-based businesses, especially women (they are primarily who I work with), the topic of charging what you’re worth, very much has to do with mindset and the energy that is created around the topic of discounting.
In effect, time is what we are selling as service-based businesses – it’s ourselves and the services we provide (whether it be coaching, counselling or consulting) and we need to realise that when we’re working with clients they are not paying us for the hour we spend with them, but rather the value we bring to the hour.
When someone discounts as the only way to make a sale, the energy (and mindset) created around that action, tells us that “I am not worth what I normally charge so the only way I can make a sale is to discount”. Doing that drains and impacts our self-worth and self-esteem, and is certainly going to make it difficult to charge what you are worth.
If however, you have planned in your marketing strategy to offer a special deal (or coupon) that offers new clients to experience your coaching at a reduced price – this is entirely different as YOU are doing this as part of your strategy. You are not offering a discount as the only way to get people through your door. That will not effect your self-esteem and self-worth, because it is a deliberate strategy you have planned.
One of the things that service-based business owners have to be aware of is who they want to work with and who their ideal client is. If your target market is renowned for not investing in themselves and therefore not willing to pay you what you are worth – as a business owner you need to think whether this is the right market for you. Are you willing to discount the amazing value you offer to that demographic. Hopefully the answer would be no and that you will seek out your ideal client who recognises the amazing results you deliver, are willing to invest and therefore say ‘yes’ to working with you.
As a service-based business owner ‘You’ are very much your brand as you are the person that is going to be working with your client. To try to be something you are not (when defining your brand) is quite difficult. Being authentic and real is so important, and means that you can show up fully as ‘you’ in everything you do and when you work with your clients.
And, yes, relationships is so very important in all businesses, whether you are a service-based business and product-based business too.
Thanks again for stopping by and sharing your comments. Really appreciated.
Stay inspired!!
This is a great post. What you say is true. I’ve offered discounts on services in the past and worried that potential clients would not only view my services as being worth ‘less’ because of it, but form an expectation that they would get discounts in the future as well. I like the ideas you present here about offering packages and especially about rewarding the behaviour you want to see, instead of devaluing yourself for a sale. Also, I agree with Kristine’s note, below, about the ‘bargain shopper’ and the ‘Groupon’-style mindset re: lack of loyalty. AnneMarie, I’m going to put your quote beside my computer where I can see it every day: “Clients are not paying us for the hour we spend with them, but rather the value we bring to the hour.”
Thanks Cathy – I think we can all relate to the position of offering a discount or pre-determining what we ‘think’ the prospect will pay us and lowering our price to suit so it’s a good reminder for us all.
One of the things I ask myself (and my clients) regarding unloyal customers who are only after bargains and who have a ‘Groupon’-style mindset is: do I really want to work with those people OR do I want to work with people who are willing to invest in themselves and value my programs and services offer? I say the later for sure. The others are NOT my ideal clients and no matter what I do or say will convince them otherwise. And, that’s not the sort of person I want to work with.
One of my mentors told me something that stuck with me. She said “you will look for evidence that proves your beliefs to be true’. If I believe that people are not going to value my programs and therefore won’t pay and always ask for discounts – then those are the sorts of people that will show up in my life. I’ll seek out those people to prove my belief. And of course the opposite is true too – that I believe my ideal client is out there, ready to invest and make a difference in their life and business, then that’s who will show up for me. I definitely choose the later!
Hey Annemarie Cross I enjoyed your informative blog post on 3 reasons why discounting your services could be damaging your reputation?. I truly appreciate this post. I’ve been looking everywhere for this! Thank goodness I found it on Bing. You’ve made my day! Thx again!
Wow this is all i need.. our public speaking class will certainly implement this tips.. Thanx Anne! Greeting from Indonesia (Bali).
Damar.
http://www.gpssbandung.com
You’re so welcome Damar – glad you found the steps in the article helpful.
Great reason why discounting your services.
Great post Anne Marie! You tell us the problem and how to correct it. Well done!
Thanks Craig, glad you enjoyed the post! I always like to share a solution to the problem so that people can be empowered to change what they are doing and get better results in their businesses!
I love this powerful article and POTENT VALUABLE KNOWLEDGE You shared with us Annemarie.
It is so empowering as I implement this now. One quandrey presents itself often… when friends ask for sessions…and not the whole enchelada (all the bonuses in the program) and they expect a savings this way. I often want to give the gift of some savings to close friends …though it’s a TRICKY STICKY SITUATION especially if they don’t yet have the right mindset.
Thanks again!
Hi – I know this post is 4+ years old….but it resonates with me even now. My husband was just asked by a major oil company to discount his services (we are in Canada) and we need the job for sure. Apparently right now everyone is discounting their services by 10%. We did not want to but did offer them a 5.5% discount and then they came back this morning asking for 10%. Offering quick approval deals will probably not work for them as the wheels turn slowly getting approvals for this type of work. And getting them to commit to our company being a preferred vendor..well they can say it but there is really no guarantee. Any thoughts on this??