Discounting = Failure

I was chatting with a business pal about the dreaded discount.

Explaining my deep rooted ‘never discount’ policy, I mentioned there were plenty of academic studies into the impact of discounting. One recurring finding being that a buyer fails to value a product bought with a significant price cut.

Buying psychology renders the attachment to your provision greatly lessened. Your discount has shown the ‘true’ value. Which is not as big as you ordinarily claim. Indeed, I’ve read studies in the past that suggest ‘happiness’ eludes many a discounted purchase. Your offering treated with less ‘respect’ as a result.

A further danger of discounting in our business space is the difficulty of ever reaping full margin for any future wares. Once the buyer expects a cost slash from the off, they expect it on every subsequent deal.

With inflation at zero – or technically deflation, rebranded by central banker Mark Carney as negative inflation – English retail news is currently dominated by talk of supermarket price wars, experiments like Black Friday being abandoned, and sales days becoming dramatically fewer.

One analyst summed up neatly;

constantly discounting is a sign of failure

He even likened the practice to an unwanted dependency;

it’s like a drug – the more [you do] it, the more [you] have to keep doing it to generate a sales hit

I often use lines like “the price is the price”.

You have a value. Defend it.

I strongly recall my own consternation a while back. I learnt of a guy providing “marketing” advice to a provincial secondary school. He charged a daily rate more than that which one huge MNC would then pay for my specialised Sales help.

That firm in question cited a group-wide policy placing a cap on third-party fees. When I pointed out that their own service rates exceeded this arbitrary ceiling, and therefore wide open to labels of hypocrisy, I got some slack.

I did defend. Firmly and politely.

All solution selling has the same predicament.

And I always promote the trusted remedy.

Never discount.

Who can afford to signal failure?