By now, you already know this: Discounts kill businesses.
I made the case in “The Discount Death Spiral.”
But that doesn’t mean it’s easy to say “no” when someone asks for a discount—especially if a nearby gym is offering discounts.
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. “We don’t play those games.”
Use this one when another gym is giving discounts.
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. “We treat all our service professionals equally well because we know our service is critical for your safety.”
Use this one when firefighters, soldiers or nurses ask about discounts.
Members of some service groups receive discounts from other businesses, so they’re sometimes inclined to ask for them.
But 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?”
Bonus: If you’re a veteran, you’ve sacrificed enough (thank you for your service). It’s time for you to get paid fairly.
4. “This rate is as inexpensive as possible for this level of service.”
Use this when someone asks why you’re more expensive than other local gyms.
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 shrinking 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.
In the next post in this series, I’ll tell you how to give an optional bonus to incentivize signups (but only if you want to).