When you discount your pricing you are training you customers to wait for a sale. J.C. Penny had trained their customers for years to wait for sales by offering coupons and great sales regularly for years. Recently they decided to make it easier for the consumer by rolling out new everyday low prices. Essentially, the customers would be paying the same amount as they did with the coupons but it was a disaster for J.C. Penny. The company lost more than $1.1 billion and its stock slid more than 60%.
The customers had been conditioned for years that you are only getting a good deal from this company if you had the sale and coupon. If you get in the habit of offering a sale on your products or services then your clients will wait and only purchase during those sales.
There are still lots of ways to attract clients with a “special offer”. I challenge you to create a value-added offer instead of a discounted offer. A value-added offer could be:
- Purchase 75 holiday cards and receive complimentary address labels
- Book a session during the month of September and receive a complimentary pocket album
- Purchase two canvases and receive the third at 50% off.
Wait a minute Nicole, isn’t that last one a discount?
Technically yes, but it’s done in a smart manner that should increase your bottom line….not cut into it. Your client likely wouldn’t be purchasing three canvases without the deal and it guarantees that you are still making a nice profit on your work.
Let’s compare two different kinds of discounting, shall we?
- $250 of your $1000 purchase
- Complimentary 12×12 canvas with a $1000 purchase
Let’s pretend that your COGS are 25%, so you would have a cost of goods sold of $250 for a $1000 purchase. Let’s also assume that your 12×12 canvas retails for $250 and costs you $50.
In the first situation, you are making a $500 profit.
In the second situation, you are making a $700 profit. The client is still getting a great gift but it is a value-added to them instead of a straight discount that is taken out of your bottom line.
I hope this helps you come up with a great call to action to book more clients. Remember, not all discounts are created equal! Offer specials that increase your bottom line and protect the integrity of your brand.
Looking for some more pricing training? Forget what every other pet photographer is charging -- the best thing you can do for your business is set your prices based on YOUR business and YOUR goals. It’s time to stop following the pack and let your rates lead you to a sustainable business!
Here’s what you’ll learn:
- The #1 thing you need to know BEFORE setting your prices
- My simple formula to set up your pricing structure for success
- How to increase your prices without losing customers
Oh, and did I mention this is a free training? Grab it below.
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