When your clients ask you for a "deal", should you discount your dog walking and pet sitting prices? Or should you stay with your normal rates?
I say...don't do it! Stick to your normal prices.
To understand why I think you should not discount your rates, let's break this down and first talk about why you think you might provide some type of discount.
First, you're probably a "people pleaser" (like me), right? You want to make people happy whenever possible.
So, when people ask for a deal, you want to give them what they asked for. And this makes both of you happy.
Providing a discount also helps you avoid conflict. When they ask for a break on the rates, if you say NO, there's immediate friction.
You're then wondering if they're still considering using you or, worse, if they're mad at you for saying NO. If you're like me, you don't like when people are angry with you.
And, of course, you provide a discount to ensure that this brand new client chooses you and not some other company.
I know that you'd provide a discount with the best intentions...to get the business and make your brand new client happy.
But discounts only do damage.
The first thing a discount does is actually reduce the level of respect the client has for you. Although they'll be happy with a break on the rates, you've just set the tone that they can ask for something significant and you'll easily bend to accommodate them.
For many clients, what this leads to is them asking for more things that make your life hard, such as last-minute schedule changes, particular activities done during the visit, and/or additional discounts, among other things.
Staying firm on your prices commands respect. It tells them right up front that it's YOUR ship and no one else is going to steer it.
And when you use our script on what to say when you're asked for a discount, your client will be impressed with your professionalism and business savvy.
You've never walked into your doctor's office and asked for a discount, have you? Well, we want your clients to think of you with the same level of respect as they do of doctors.
Providing a discount on your prices also hurts your profitability because your revenue is immediately impacted.
Over the course of time, a dollar here and a dollar there really add up.
Let's just take one client for example. If you do two dog walks a week all year long for this client and you discounted their rate by only $2 per visit, you've just lost $208 over the course of the year ($2 X 104 visits).
If you have five clients you've provided this discount to, you've just reduced your income by over $1000 over the course of the year!
Would it be helpful for you to have another $1000 coming into your company every year? I'll bet it would.
There are many factors that play into both sides of the equation when facing a discount request, but the bottom line is that you don’t want to cut your price because you do something special that no one else does – you’re the professional!
You’re providing a service that is almost entirely built upon the fact that a customer knows, likes, and trusts you with their pets. That kind of trust is worth a lot.
You do not provide a commodity product where a customer can get the exact same thing for a dollar less down the street. What you provide is unique. And the type of customer that you want has no problem paying a very fair price for it.
Even if a customer is not trying to negotiate, there is no need to talk about “competitive pricing” or “price matching” or anything else that involves you lowering the perceived value of what you do.
You should not own the market position of being the low-cost leader. Leave that to Walmart.
You provide the most unique, reliable, and professional service your customer will find. That type of service is never the least expensive. And that’s what people expect – and subconsciously want.
The race to the lowest price benefits no one. Don’t get in bidding wars to get a customer that only wants the cheapest service. They are sure to be trouble for you down the road.
Be confident that you provide a very fair value...because you do!. Believe this in your heart and mind and don't be scared to say that you don't provide discounts.
Customers will actually be drawn to you because of your strength.
Do you provide discounts? How has your policy worked for you in the long run? Let us know in the comments below.
John loves animals and business. He put the two together and built a multi-million dollar dog walking/running and pet sitting business with hard work, systems, and great people. He now teaches everything he's learned in the Pet Business Masters! community.