Money

Two Steps To Say No To Discounts

Bill Faeth
Posted on May 10, 2019
(LCT image)

(LCT image)

One of the biggest problems I see small business owners make is to use discounts as their primary form of landing clients. Unfortunately, when you use this strategy, you lose your pricing anchor and compromise your clients’ future perceptions. Your clients will come to expect the discounted rate on future trips.

“People get addicted to discounts. They don’t get addicted to free.” This is a quote I have used many times. This phrase was coined by Jon Taffer, who was the keynote speaker at the International LCT Show in Las Vegas. I love this quote so much and believe every entrepreneur needs to protect their pricing integrity no matter what.

Yes, hopefully we can talk about how great Jon was and how his session helped you. I would like to hear what you have already implemented in your business to increase your profits.

To avoid discounting your rates as a tactic to acquire new customers, I recommend you implement two things into your sales process. Please understand when I refer to your “sales process,” I mean anytime you are discussing your business with a potential client, not just when you are in a sales meeting or at a networking event.

Related LCT article: How Do You Float Your Quote?

NO. 1
You absolutely must qualify your prospect before you offer any type of discount or free trip. This means you need to look deeper than just the single airport transfer they are asking about. You can do this with qualifying questions such as, “How many times a month do you travel out of town?” or “Do you regularly travel for work or business?”

If they answer “yes” to the second question, then you need to follow up with the first question. If the prospect states he or she travels weekly, then you know you should be able to capture two transfers per week and possibly four if you can acquire the out-of-town travel. Two sedan transfers per week at $100 each X four weeks = $800 per month in revenue. Annually, this client would be worth $9,600. If you can acquire the out-of-town work, this client’s value doubles to $19,200 annually and this does not yet include any personal travel or as-directed trips.

NO. 2
Now that you have qualified your new prospect, it’s time for you to close. The easiest way is to offer an opportunity for them to try your service for free, but you must position your “pitch” correctly. Try something like this: “I would love for you to test our services for free because I am so confident we will blow you away with our service you will not want to go back to your current provider.” Can you hear the confidence in your voice? I can hear it in mine. It is loud and passionate. It must be.

If you take Jon Taffer’s quote to heart and closely follow the two steps above, you will not only increase your number of clients, but ensure protection of your pricing integrity (because you will not be offering discounts early in the client relationship).
Make some money first, then comp a trip for your best clients when they least expect it. People love the unexpected, especially when it saves them money.

Related Topics: Bill Faeth, building your clientele, business growth, customer service, discounts, How To, Profit Motives, profits, rates, revenues, service pricing

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