Should I be Discounting my Pricing right now? (Covid-19)
I understand that there is a huge genuine desire to help and serve right now when many people are struggling to adapt to being at home, the anxiety created by the current pandemic, and for some groups of people (but not all) a concern about how their income is being affected. And I know that for many of my clients the natural response is to want to help by heavily discounting their programmes and services.
However I think it’s important not to discount as a knee-jerk reaction either to “wanting to help” or to a feeling of fear, or pressure to bring in extra income
In this video I addressed the question of “Should I be discounting?”. Including talking about why I’m personally not discounting right now, and the knock on effects it could have on your business if you do decide to discount. Plus some important things I recommend you consider before you decide to discount your existing offers.
First, explore your motivation:
The first thing I’d encourage you to explore is the motivation behind the feeling that you want to discount. It’s likely to be one of the following:
- Pressure to bring income quickly
If you are coming from a place of wanting to “rescue” others this is likely to be something that already plays out in your business through weak boundaries, low pricing and a tendency towards discounting even in normal times.
Why I’m not discounting right now:
I’m not personally offering any discounts right now. For me this undermines the value of offers that are already set at fair prices. This means at a level that is affordable to my ideal clients and at a level that I need them to be for me to have an healthy and sustainable business.
4 Reasons not to Discount:
- Perceived value next time you make the same offer
If you’ve been seen to slash your pricing it will make it harder to offer full price next time, because the perception will be that the offer or service is now “worth less”. So you may find it harder to sell at full-price at the level you need for your business to be healthy once we come out of this pandemic.
- The effect on your profits
Your expenses are probably the same as before, so any extra deep discounting will have an effect on your profits – this might even impact what you can afford to pay yourself, and could even have an effect on your ability to pay your suppliers, team members and other small businesses that rely on your custom.
A very low cost offer requires you to sell to more people to make the same amount of money. It’s worth considering whether you have the resources in terms of system, team, skills & knowledge and/or your personal time to make this work without it burning you out. Worth considering especially if you are also juggling extra child-care right now.
OK so this is more of a “personal” one for me because fairness is such a high value of mine. But in my mind if Felicia bought a programme last month, why should it be less for someone else who buys this month? It’s the exact same programme, or service, delivering the exact same value and transformation as it did last month. And I could even argue that mastering the skill of having effective yet sensitive sales conversations has even more value this month than it did 2 months ago.
What to do Instead of Discounting:
If you are currently feeling drawn (or even compelled) to offer discounts to your normal services and programmes then I recommend you consider these 7 things before you do that:
- Slow down and take your time
Be mindful of knee-jerk or panic discounting. Take some time to check in with yourself – make sure it’s coming from a healthy motivation, and that any discounts you do offer are also strategic decisions designed to both serve your clients and you and your business over the longer term.
- Offer at full price
Don’t automatically assume people won’t buy from you at full price. As I talked about in a previous video it’s the assumptions you are making right now that are going to do the most harm to your business during Covid-19. It’s absolutely not true that people are not paying for things right now. In fact 2 members of my community have had record sales since the start of the “lockdown” period – with no discounting.
- Explore your resistance to Sales & Marketing
It’s worth pausing to explore if this tendency to want to discount is really coming from a discomfort with sales & marketing generally – one that is probably already there even during more normal times. Rather than rushing to discount, this could instead represent an opportunity for you to observe your patterns, thoughts and feelings around sales – maybe spending some time working on your blocks around this could be
- Create a Premium Offer
I realise this might sound counter-intuitive at first, but I strongly recommend that before you rush to discount, you create a Premium Offer, especially if your motivation for discounting comes from a pressure to bring in money quickly. I guarantee that it is much easier for example to sell one programme for £3,000 than it is to sell 10 programmes for £300. This is as true right now as it is at any other time.
- Create something NEW at a lower price point
This is a much better option than discounting – especially if you can make it clear how it differs from your usual offers. This way it becomes a part of your sales pathway, rather than risking undermining your future offers. For example, if I was to discount my online programme to half price now, anyone who buys is no longer a potential customer for when I offer it again in September. So I’ve lost twice – now because I discounted, and again because they will not be in the market to buy from me at full price later. However if I offered a different programme right now but at a lower price it could be the perfect stepping stone into the full-price offer further down the line.
- Grow your Audience
If you really want to serve and help people then this is a perfect time for you to focus on delivering value for free, or creating lower cost offers (as above) and using these things to grow your audience – in other words using this time to focus on growing a strong foundation of people who know you and value what you offer – so that when we all get back to “normal” you are in a really strong position to make sales at your normal full price.
- Be of service for free.
In my opinion are better to do this than heavily discount your prices overall. Many of you are feeling this call to discount because you really want to help. You see people struggling right now, emotionally and practically and you know you have the tools to help. So you can use that very same motivation to serve and add value for free.
A Word of Warning about “Free”
When it come to free just make sure that you are not falling into a place of “overgiving” and taking more responsibility for others than you are taking for yourself. In other words don’t give and help others at the expense of your business and yourself.
Yes, of course there is a huge genuine desire to serve and help right now – I feel that too. So do be generous and give from the heart. But also be thinking about you can do that in a way that will also support your business over the long-term. Because this pandemic won’t last forever.
Ask yourself how you can give value and help people AND bring them into your “orbit” (your customer pathway) so that they stay in touch and are ready to become paying customers in future?
You can do this by:
1. Inviting people to sign up for something of value for free so that you can keep in contact with them over the longer term.
2. Making it a condition of receiving your help for free that people register too hear from you over the longer term
2. Reminding them of the ways you can help them and directly tell them how they can find out more.
In other words always have a clear “Call to Action” that is going to serve you, your business and your clients over the longer term.
How about you?
Are you tempted to cut your prices or move to a free offer? I always love to hear from you so please share your thoughts and experiences in the comments below.
And if you haven’t yet signed up, you can sign up for my free 7 Steps to Yes! training for authentic sales conversations. Step 6 which includes handling concerns elegantly and sensitively is particularly relevent during these times.