Why giving a discount to win a customer will never work

It would be pretty absurd if we refused to work with someone because they liked Cappuccinos as opposed to Americanos. Yet we do it all the time. The decision we make isn’t on the type of coffee, though; it’s on price.

Every business owner I know has used ‘Sorry, I can’t afford that’ to tell another business owner they can’t do business with them. But it’s not true, with the exception of those really struggling to put food on the table.

For most, if they really wanted to work with someone and cash was a little tight, they would eat toast for breakfast, lunch & dinner for a month.

Using the price excuse is an easy way out!

In most cases, they can afford it. Using the price excuse is simply an easy way out. That is until they’re offered a discount and find it harder to say no. Possibly, they’ll avoid emails, texts, and phone calls to get out of the situation they now find themselves in.

Sound familiar?

What’s really happening? And how can you use it to your advantage?

What’s really going on is that we use price as an excuse to avoid saying what we really feel and think.

For example, you might not like a business’s values, but you’re not courageous enough to say so. Or maybe you don’t like how they come across, or perhaps even how their accent sounds.

None of this is judgemental. It just is. It’s also no different from preferring a Cappuccino over an Americano. That said, the price highlights something to us.

Indecision with price tells us we have doubts about working with a business

If we’re undecided about taking action, we’ll hum and ha, and consciously look for things we don’t like. Price is the most obvious!

Unconsciously, though, your intuition is nudging you not to work with them. If you listen to that nudge, it will bring you insights into your own values. Alternatively, it could be asking you to re-evaluate your intentions but let’s look at what it tells you about your own preferences, as that’s far more likely.

A personal example, a confession, and an insight

For example, I was thinking of advertising again with an organisation but when I spotted they’d increased the price I was like ‘ouch’. I then asked myself if I really thought I’d get a return – I had advertised with them before, so had already introduced myself to their audience, therefore a return was likely. However, I then asked myself if I truly wanted to work with this audience and I got a ‘No’.

When I got curious and asked myself why I felt this way, I gained insights into the sort of businesses I wanted to work with, and why. I also realised why I didn’t want to work with just one gender, which is what this particular audience was.

On the personality side, I’m a Libran, and an accountant; I very much like balance. Income and outgoings. Male and female. Price and value.

In terms of preferences, I like to work with organisations that have both genders on their management team – the energy feels balanced – and will happily work with just one gender if they bring both their masculine and feminine energies to their business. I enjoy networking events filled with both men and women. When in a large room with only one gender I can sometimes feel off balance.

Why? No idea… It just is — and, the more I lean into that, the more insights I gain about myself and the kind of people I like to work with.

Questions to ask yourself

Who have you said ‘no’ to recently, purely based on price, but felt a little guilty at not being totally honest?

Why didn’t you want to work with them?

You don’t have to publicly announce the reasons, but be honest with yourself. No one is listening to your thoughts or feelings.

If you don’t already know the answer, do this now. Quieten your mind for a moment and curiously ask yourself some questions, or simply ask ‘why?’

In time, you’ll gain valuable information that will help you with your own customers and in choosing suppliers.

How understanding this helps your own pricing decisions

For example, imagine a business saying ‘Sorry I can’t afford that’ to you. Giving them a discount is not going to help them. If anything, it might make them avoid you! 😉

So, next time someone says ‘Sorry I can’t afford that’ reply with ‘Thank you for letting me know you don’t want to work with me. I hope you find the right person who is more suited to your values or desires.’

For the record, I want to add:

It’s still ok to offer a discount for loyalty, paying up front, or for whatever other reason you feel drawn to

Don’t do it, though, in an attempt to win a business over. It won’t work unless they really are hard up.

Share your insights and questions

If you feel like sharing your insights or asking a question, please comment below. We’d love to hear from you.

Oh and, for the record, I don’t like Cappuccinos; I much prefer Americanos with no milk or, for a real treat, a coconut-milk hot chocolate.

By Helen Monaghan

Author of Successful Business Mi nds, The Magical Mix of Money & Tax, and 12 Steps to Improve Your Cashflow.

ABOUT THE AUTHOR

Helen Monaghan is a Chartered Management Accountant, accredited NLP Practitioner & Finance Coach. Both a psychology graduate and an accountancy graduate, she has authored three business books, which beautifully bring together psychology, finance, and tax to empower the reader about money. Helen is the CEO of HM Finance Coaching & Advisory Ltd, a company that provides financial education and business mindset coaching to small businesses across the UK, in addition to accountancy services for limited companies in Scotland. Helen is also the founder of The Financial Resilience Hub – find out how we can support you, and your business, to be financially resilient through our monthly membership.