By now, you already know this: Discounts kill businesses.
I made the case in “Why We Don’t Have Sales.”
But there are two parts to change: The first is making the decision to change, and the second is actually making the change.
In other words, knowing what to do is half the battle (or less). Taking action is really all that matters. To help you act, I’ll supply the easiest ways to say “no” when someone asks for a discount.
1. “We don’t have discounts.”
This is my go-to. Because I don’t have discounts for anyone, it’s simplest for me to say that discounts don’t exist. This has solved our “discount” problem for over six years.
2. When someone else is giving discounts
“We don’t play those games.”
Because the nature of discounts is subjective (it requires a human “decision” instead of an automated process), it’s always easy to cast a shadow of doubt on the intent on the discounter.
I saw this in action when I was selling high-end fitness equipment. We were always in a losing price battle against Sears and other department stores that ran frequent “sales” on treadmills. So when someone asked us to match a price or when we’d have a 40 percent off sale, we’d say, “We don’t play those games.”
It worked: You could see a visible shift in the purchaser as he or she became suspicious of the chains offering the discount. It helped that one of the department stores was sued for advertising a regular price on tires that it never actually charged—they were always on sale. I occasionally brought that up.
3. When someone asks for a specific discount
Members of some service groups receive discounts from other businesses, so they’re inclined to ask for them everywhere. Here’s your response:
“We treat all our service professionals equally well because we know our service is critical for your safety.”
The service you provide to military staff, police officers and other safety workers isn’t five bucks off: It’s keeping their butts alive. Remind them (gently), and also use the peer anchor: “No one else gets a discount, and you don’t want to be different from the crowd, do you?”
4. When someone asks why your rates are so much higher than everyone else’s
“This rate is as inexpensive as possible for this level of service.”
First, don’t ever say “cheap” unless you’re talking about the competition.
Second, you’re sticking a wedge into the conversation: “for this level of service.” That phrase should prompt an opportunity for more explanation. But don’t expand unless asked.
A couple of other things:
– Don’t over-explain. All these responses consist of one sentence. The more words you use, the more handholds you give the person asking for a discount.
– Keep it black and white. If you give a discount for one person in your gym, you’re ripping off everyone else.
– Your primary duty is to your current clients. Scrambling to recruit new clients with discounts your current clients can’t get is a breach of trust.
– Don’t run through all the scenarios in your head before a conversation starts. You’ll be trying to “remember lines” instead of giving honest answers, which come naturally. Especially if you use response No. 1 above, communication is easy and transparent.
– If they say, “I’ll go join the cheaper gym,” that’s good. You don’t want everyone. Don’t pour your knowledge and care into fickle clients who are only after the cheapest rate.
– Finally, don’t presume anyone wants a discount. This is the No. 1 error business owners make: We project our own budgets onto other people.
Lower Prices Require More Clients
Years ago when my gym opened, I was desperate for cash flow. So I started offering discounts for teachers, military, spouses and so on. It was a pretty long list, and it got longer all the time. In the discount mindset, I’d actually try to find a reason to discount people. Without a client even asking, my mind would race to find a way to make an exception for him or her. Soon I had a gym full of members, a 15-hour day and a redlining bank account.
Every time you give a 20 percent discount, you increase the number of clients you need to reach your perfect day. You weaken your business and impoverish your family.
You know why no one ever asks me for a discount?
We don’t give any.
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