Why Do Customers Ask You For Discounts?
Small business owners are almost always plagued with requests for discounts from their valued customers. The reasons vary from a customer looking for a good deal to a potential customer just chancing. There isn’t much you can do if those are the reasons for their requests. However, there are measures you can take to significantly minimize or completely eradicate the option in the eyes of your customers without losing or compromising the deal.
How professional are you?
Work on improving the manner in which you run your processes. If you communicate with potential customers in an informal manner, you are likely to encourage them to view you as ‘just another person doing business’. This will undoubtedly lead to requests for discounts and other non-sales complimentary requests.
Ensure that your terms and policies are clear right from the beginning. This shows your prospective clients you are organized. Furthermore, anyone wishing to do business with you fully understands how you operate.
Use A Professional Email Address
Use a professional business e-mail address with an e-mail signature. It should have your contact information including your position. This often neglected practice instills a sense of confidence in customers and prospects compared to using an email address like, firstname.lastname@example.org.
Is Your Pricing Appropriate?
In most cases, if you are selling a product that provides more value than the competing alternative, customers will choose your offering. If your offer provides less value than its competing alternative, customers will ask you for a discount or worse, shop elsewhere.
A value-based pricing strategy determines how much money or value the product or service will generate for your customer, which could originate from factors such as increased efficiency, time-saving, happiness or stability. You might also offer good credit terms, product guarantees, next-day delivery, exceptional customer service and technical support.
Value-based pricing is all about the customer and their willingness to pay. Generally, a value-based price is higher, yet the customer is willing to pay more because the product offers them something extra. Because consumers compare prices all the time, competitor based pricing should be a part of everyone’s pricing strategy, but not become the “be all and end all”. Remember, many customers would be willing to pay more for a premium product and exemplary service.
What Customers Don’t Care About
Difficult to hear, maybe, but all customers really care about are the attributes of your product and what value it offers them, not about how much it cost you to produce or supply.
As an example, customers will be willing to pay more for a Smartphone that has the features that best serve their lifestyle regardless of the manufacturing costs. If a customer’s willingness to pay is not based on the cost of goods, your price shouldn’t be either.
Foster Customer Loyalty Through Impeccable Service Delivery
Loyalty is an old-fashioned word traditionally used to describe fidelity and enthusiastic devotion to a cause or an individual. In a business context it describes a customer’s willingness to continue buying from a firm over the long term, preferably on an exclusive basis, and recommending the your products or services to friends and associates.
Customer loyalty is seen as a key determinant of a firm’s profitability. Your goal should be to make your customers feel good about shopping with you – and want to return.
For example, many food delivery customers in Africa show complete loyalty to their favourite delivery service. The food delivery purchasers identify with its brand and cherish its design, integrated and smart solutions and excellent product quality. These customers integrate the use of several other types of food such as their drinks, desserts, snacks and main meals and they frequently participate in the food delivery’s competitions.
Despite the strong marketing efforts of competitors these customers have a deeply held commitment to buy only from this food delivery business in the future, whatever the cost.
Final Thoughts on Customers and Discounts
Identify your key competitors (the ones who affect your sales the most) to make a competitive analysis of your pricing.
Ensure that your customers have a clear understanding of what value you are offering – and make sure this is shouted from the rooftops!
Entrepreneurs who have well-defined pricing strategies are 40% more likely to realize their monetizing potential than entrepreneurs that don’t have them.