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Mike Krause’s Sales Sense #14: Discount Doom! How much is enough?

Guest post by: Michael Krause

Article Overview: I get it- discounts drive new clients. I understand Groupon and the millions of other companies that are on the deep-discount bandwagon. Don’t get me wrong, I’m a bargain hunter too, however the business doesn’t always benefit from these massive discounts to grow their business. We all have read about how Groupon and like-minded companies are NOT paying off for businesses:

Mike Krause’s Sales Sense #14: Discount Doom! How much is enough?

I get it- discounts drive new clients. I understand Groupon and the millions of other companies that are on the deep-discount bandwagon. Don't get me wrong, I'm a bargain hunter too, however the business doesn't always benefit from these massive discounts to grow their business. We all have read about how Groupon and like-minded companies are NOT paying off for businesses:

1. No repeat business-people come once and never come back commonly called "coupon hunters"

2. Under profit margins on the HUGE discounts offered by Groupon

3. Clients perceive establishment as a discount place and are never able to restore value back to full price.

Let me give you an example of ludicrous discounting; this week I received an e-mail offering a $7,995.00 discount off an $8,995.00 item for a complete DVD set with a 12 month membership from a company. These were my first thoughts:

1. Price gouging!!!

2. What value are you TRULY offering to your clients?

3. What about the client that paid $8,995.00? How do they feel?

It's okay to discount on occasion your product/service, but how much is enough?

I would love your hear your comments about discounting:

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Article Tags: discounts, groupon, Sales, sales training, small business



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