February 6th, 2009 in We all know that when we discount a price, say by 10% on a $1000 product, we’re kissing good-bye to $100. That is not 10% of your profit. If your profit is $400 it’s 25%. Do you ever get it back?
You can argue that $300 is better than $0 … and there is a truth in that.
Instead of lowering the price think about giving extra value. Instead of reducing your profit take something that has a high value with little cost and turn it into an incentive.
For us it might be an enlargement or extra time. The value part in this is that it gives more to your client and takes less from you.
If you create a ‘discount culture’, are you saying that you’re charging too much to begin with, because your ability to be flexible suggests you were charging a premium for your services? Does it affect your ability to return to your original pricing?
If your base price is too high for your client, could you remove something to justify reducing it, then offer back what you removed as an incentive?
As an example, if your base price is $2500 for 4 hours of coverage, do you offer 3.5 hours for $2350, which may be more affordable? At your discretion, after you have decided you really want this wedding you could then give back the extra half hour at no extra charge. Effectively you haven’t given them a discount, you have given them an incentive.
This way you get to hang on to your integrity.
Best wishes, Johannes
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