The Truth About Discounts: How They Can Hurt Your Business More Than Help
The Truth About Discounts: How They Can Hurt Your Business More Than Help
Discounts might seem like a smart way to attract customers, but in reality, they can lead to more complaints, unrealistic expectations, and lower profits. Here’s why standing firm on your pricing is the better strategy.
The Truth About Discounts: Why Saying Yes Can Cost You More Than You Think
After years in the catering business, I’ve seen this pattern play out time and time again—and I’m fairly certain it applies to most industries.
Customers who ask for discounts are often the hardest to deal with.
They complain more.
They expect special treatment.
They’ll push for more discounts in the future.
And worst of all, they make it harder to hit your profit goals.
Stand firm. Know the value of what you offer. And don’t be afraid to say no—politely but confidently—when a customer asks for a discount.
In performing due diligence for a recent investment into Crocs, I learned that they made a bold move recently—one I respect. CEO Andrew Rees said they’ve stopped price matching with unauthorized sellers on Amazon. In other words, if someone else is slashing prices on Crocs, Crocs isn’t playing that game.
Why? Because discounting just to keep up with rogue sellers drags down your brand and your margins. Crocs is choosing long-term brand value over short-term sales bumps. Sure, it might sting a little in the short run, but they're betting on stronger profits and a clearer message to customers: If you want the real thing, buy it from us.
This is exactly why I believe discounting is a slippery slope. You train customers to expect the deal, not the value. And once that happens, you’re stuck in a race to the bottom.
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