Never Promote Discounts! (Pricing Strategy)

I’ve been saying this for a long time and feel it applies especially for small business:


If you need something to promote, promote FEATURES (or BENEFITS) but never promote discounts!

Giving discounts in subtle manners that don’t piss of customers that paid full price is ok, but DO NOT PROMOTE DISCOUNTS!



Promoting Discounts is (Usually) STUPID

Let’s start with where most of us even get this idea from. Most of us get it from all the largest brands out there. Super markets, clothing stores, furniture stores, automobile companies and on and on and on.

And most of us fail to realize, this tactic can ONLY work for them but never for us little guys!

Discounts wreck your price integrity in consumers eyes as they start to lose respect/value for your prices over time. The negative effects impact you less if you:

  • have tons of products (and only discounting some)
  • regularly change your products (and discount “older” ones)
  • discount products during launch but increase them after launch

This is why it works when big retailers with many products or often-changing products can discount….but absolutely horrible and not recommended for a company with few products that stay the same (like APPLE).

As for throwing in more and more bonuses, I don’t like that idea too much either but it can work and still retain your premium pricing if the added value is just enough to feel like added value but not so much that it feels like you’re throwing products away to get sales (desperation).

Discounting to increase sales might work the first couple times but soon afterwards customers stop buying (losing respect for regular prices) and just wait for the next sale. If you’re gonna promote, promote features and value, not discounts!

Train your demographic to look for features/benefits, not price!

So how DO you give discounts without losing respect?

That’s an art in itself. You never want to show a lower price that allows people to think “this brand/product isn’t worth full price”. You want them to think they’re actually getting a discount!

These are the only discount methods I approve of:

  • Private discounts – given only to special VIP insiders group for a legitimate reason! Other people shouldn’t see them.
  • Clearance discounts – perfect for getting rid of old stuff…it actually creates value for your new stuff. In contrast, the worst strategy is to give discounts on your newest items!
  • Group discounts – don’t go crazy with this…give only 10% max if they buy many seats.

And there it is…

Discounts should INCREASE brand value (not hurt it).

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