Should I Discount If My Price Is Too High?

Sometimes we use discounts to try and win new clients – this is a terrible idea.

We allow ourselves to lower our prices by telling ourselves that we will make up for it in the future - that we will raise the prices next year and start making a profit.

Then we never do it.

The first price you give creates an expectation with the client. If you start off cheap, they are always going to expect you to be cheap, and you’ll find it much harder to raise your prices once this expectation has been created.

You can watch the video here.

 

The Golden Rule: Never Discount

 You should not give out discounts to win clients.

Maintain the integrity of your pricing structure. Be confident about the value you deliver to your clients. Do not discount.

The most successful businesses don’t give discounts. Think about it – when was the last time Apple ran a sale? When was the last time Starbucks lowered their prices? When was the last time you walked past a Ferrari garage and they were doing a special promotion?

Successful businesses do not discount because they recognise the value of their product, and the value of what they do. You should do the same.

 

But What Do I Do If I Really Want The Client?

If you’ve met with a prospective client, and you really want to work with them, but they can’t afford you, you should still not be giving a discount.

At least, not without getting something in return…

If the client can’t afford you, one option is to walk away. But if they seem really ideal for your business, have a great attitude and are really keen to work with you, you could instead try using behaviour rewards.

With behaviour rewards, you swap something.

If they want a lower price, and you want the client, then you can give them that lower price, but only if they give you something in return.

You reward them for exhibiting the behaviours you want and will make your life easier. For example…

  • They pay you in advance
  • They deliver their records in your favoured format
  • They deliver information quickly, or by a certain deadline
  • They do some of the work themselves
  • They give you some referrals

You could reward your client with a discount if they agree to do something that will make your life easier.

 

How To Ask Them To Give You Referrals

Let’s say you’ve decided that if a prospective client gives you 3 referrals you will discount their price by 5%. Here’s how you might ask for that…

“The way that we grow our accounting firm is through word of mouth, through referrals, through recommendations. If you are willing to help us by recommending 3 clients to our firm, what it means is that we can reduce our marketing spend. When we reduce our marketing spend, we can actually pass that spare money over to you in the form of a discounted price. Are you willing to refer us 3 clients? 

The client will agree to this in a heartbeat!

Even though you are getting a lower price, you have instead gained the 3 new referrals which are equally as valuable to the growth of your business.

You should never discount – instead swap something.

If you found this valuable and would like to learn more about value pricing, I run a free online training session every month. You can attend live and ask me questions which I will answer there and then on the session. Click here to attend and I will send you an invitation to the next session. 

And if you would like to join a community of like-minded accounting professionals learning to price more effectively and confidently, you can join the Facebook Support Group here.

 Wishing you every success on your pricing journey.

Mark Wickersham

Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller, “Effective Pricing for Accountants”

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