Are you hurting your business using discounting as a sales strategy? Your customers may love it, but nothing hurts your profit more than discounting. There are easy alternatives to make this a win-win for you and your customers.
Are you hurting your business using discounting as a sales strategy? Your customers may love it, but nothing hurts your profit more than discounting. There are easy alternatives to make this a win-win for you and your customers.
Let’s get honest. If you discount, you lose profit.
We make a widget that should retail at £100 giving us a £20 profit.
we give a 10% discount; we’ve just lost 50% of our profit!
Imagine you’ve been invited to a prestigious event and you’re at the tailors, looking for a new suit. The one you love costs £500 so you ask for a discount. The tailor’s profit is £200 on this suit, so if he gives you his normal 10% discount to win the sale, his profit is down by 25% – £150 from £200. If the tailor offers you a complimentary silk tie priced £50 (cost price £15) you walk out with a suit and tie valued at £550 and the tailor has made £185 rather than £150. He’s increased his profits on that sale.
Virtually every manufacturer faces this dilemma because you want to maintain sales volume and win the order. Think twice before you adopt discounting as a sales strategy, there is usually a better way.
I would be glad to talk to you more about this and explain other simple profit boosting strategies. It’s incredibly easy to get started. Click here for more information.
