No Discounts!
Why You Should Never Lower Your Prices for Free
In the world of business, it’s tempting to offer discounts to win over customers, close a deal faster, or stand out in a crowded market. However, offering discounts without a clear strategy can be a dangerous move that undermines your value, erodes your margins, and sets unrealistic expectations with your customers. The truth is—you should never give any discounts.
Discounting can signal to your customers that your original price wasn’t justified in the first place, weakening your brand and positioning. It can also attract the wrong type of customers—those looking for the cheapest option rather than valuing your unique offering. Worse, once a discount is given, it becomes difficult to return to full pricing, trapping you in a cycle of undervaluing your business.
But wait—what if we approach this differently?
A New Take: No "Free" Discounts – Always Trade Value for Value
I believe that while you should never give free discounts, you can provide discounts in exchange for something of equal or greater value. If a customer asks for a price reduction, you should request something in return that benefits your business. Discounts should be strategic tools, not giveaways.
The Win-Win Approach to Discounts
If a customer requests a 5% discount, here’s how you can turn it into a win-win scenario by asking for something valuable in return:
Upfront Payment:
Instead of offering a discount outright, propose a deal where the client receives a small price reduction in exchange for full or partial prepayment. This improves your cash flow and reduces financial risks.
Longer Commitment:
Offer discounts only if the customer commits to a long-term agreement, such as a multi-month or multi-year contract, ensuring stability and recurring revenue.
Case Studies & Testimonials:
Require the customer to provide a testimonial, review, or participate in a case study that you can use to build credibility and attract future clients.
Referrals:
Offer a discount in exchange for introductions to potential clients or strategic partners that can generate new business opportunities.
Bulk Purchases:
Make discounts conditional on larger volume commitments, increasing your total sales and justifying the lower per-unit price.
Favorable Terms:
Negotiate for better contract terms, such as reduced complexity, quicker decision-making processes, or exclusivity in a specific market.
Brand Visibility:
If your client has a significant audience, propose featuring your brand in their marketing efforts, events, or online platforms in return for a discount.
Why This Works
By implementing this approach, you're reinforcing the idea that your product or service holds real value—one that shouldn't be arbitrarily discounted. Instead, you’re using discounts as a strategic lever to strengthen your business, improve cash flow, and enhance your reputation.
This also trains your customers to appreciate the full value of your offering while fostering a professional, mutual exchange of benefits.
How to Implement This Strategy
Set Clear Policies:
Establish internal guidelines on what trade-offs are acceptable for discounts and communicate these to your sales team.Educate Your Customers:
Be transparent with your clients—explain why you don’t offer free discounts and outline the potential value they can provide in exchange.Stay Firm on Value:
Confidence is key. Never cave to pressure without securing a mutually beneficial arrangement.
Next time a customer asks for a discount, don’t just say “yes.” Instead, take control of the conversation and say:
"I’d be happy to discuss a discount, provided we can explore an arrangement that brings value to both of us. Would you be open to prepaying for the order, providing a testimonial, or referring us to a new client?"
This mindset shift will position your business for sustainable growth while preserving the integrity of your pricing model.
Remember: No free discounts—always trade value for value.
