Discounting Your Products or Services … Good Idea or Bad Idea


Strategic Discounting


As far as discounting your products or services … good idea or bad idea, the first thing you need to do … is decide why you’re doing it … Start with a clear understanding of your objectives … How else are you going to know if you’re successful or not?

Unless you’re looking to establish yourself as a discount retailer … Make sure that you’ve exhausted other options that may preserve you and your profit margins …


Here are some sample objectives for discounting your products or services:

  • To generate leads. If you are seeing a dip in Lead Generation, you may want to implement a discount promotion to attract new prospective customers.
  • To increase sales. If increasing sales is your objective, make sure you’ve reviewed other Strategies (and there are many) for achieving this objective. It can be very difficult to increase overall revenue with discounting since your increase in sales volume needs to cover your costs and loss of profit margin.
  • To move an old product. Discounting out-of-season merchandise and products that are nearing their expiration date might be a decent idea.
  • To lure back old customers. You’ve already paid to acquire the customer, so you have a bit more room in the margins to discount.
  • To promote a new product. If you are launching a new product or product line … you could use a short-term discount strategy to encourage people to try it out and or join a list … Have you calculated the “lifetime value” of a customer?
  • To save fleeing customers. If the competition is offering lower prices you may need to win the price war over the short term … However, an Added-Value Strategy may be more effective (your profit margins will thank you) at keeping your current client base. “The Happy Meal at McDonald’s”?
  • To increase the average dollar sale. Offer a discount on all purchases above a set value to encourage greater spending … Price this value at 30% above your current average dollar sale, and offer a 10% discount. You’ll have a guaranteed increase in average sales … “Supersize it”?


Always know this, if you discount too long, you run the risk of either acquiring customers that will never pay full price, or an inability to compete with other businesses …



People get addicted to discounts …
they don’t get addicted to free …



Please share! And we await your comments and questions
Share on LinkedIn
Share on Facebook
Tweet about this on Twitter
Share on Tumblr
Pin on Pinterest
Share on StumbleUpon
Share on Reddit
Buffer this page
Print this page
Email this to someone