Donna Bordeaux (Donna Genie) argues that discounting damages perceived value and harms businesses. She explains the psychology: discounts reset customer expectations to the lower price, and instead recommends keeping list prices firm while offering added value or free/discounted add-ons. She also addresses cultural bargaining norms and encourages business owners to 'say no' to discount requests and focus on building value.
Hi, I'm Donna Bordeaux with pypaccounting.com let's talk discounts for a minute. I think the practice of discounts destroys a lot of businesses. So I want to talk about why I feel that way and, and the psychology of a discount for a moment. First off, the discount trap, there's no need to offer a discount. What you're really doing is reducing the perceived value of the service or the experience that you offer. What we really need to be doing is going the other direction. We need to be increasing the value of that experience, not decreasing it. So by discounting, let's say it's a $50 product and you reduce it to 40. Now the value of that product is 40. So if someone else comes in that knows about that sale, they expect to pay 40, not 50. Whereas if that discount had not been offered, most people would have assumed the value of 50 like you're asking. Okay. I always tell people when I see an ad for something that's $1,000, your best offer, that means I can bargain. That means they know it's not worth a thousand dollars. I want you to set a price and stick to it. If you want to offer an incentive for your customer, I want you to go the other direction. Give them something extra for their value. So for example, if you sell a piece for $50 and you want to do some sort of promotion, offer them that piece for $50 and give them an add on for a reduced price or for free. That makes the value of the piece still be $50. And they feel like they've got something extra from you, not a reduced something or a reduced value of their experience in your studio. So do me a favor, help me in my pledge to the industry. Let's get rid of discounting. We don't need it. And I'll tell you, let's talk about why you offer discount. All right? In many cultures, discounting and bargaining is a fact of life. They feel like they can't buy anything unless they bargain. All right? That is not our culture in the us that is a foreign land culture for many countries. We don't have to use that same culture here in the US in our businesses. I want you to be proud of your pricing and of your experience and your products in your studio, and stick to it, okay? So the next time you're asked for a discount, the reason that you offer them is because you don't want to say no. I want you to learn how to say no Disc. Don't be afraid of it. I promise you people are not going to leave your studio because you don't offer them a discount or one step more if they do. They were not your target audience. If your target audience is completely based on offering discounts, you are not building the value in your studio you need to. There are many people out there who would never dream of asking you to cut your price or offer a discount. In fact most are willing to pay you more than that price you have on the shelf or on your listing. So stop offering discounts. Switch your perspective. Offer something extra in value rather than reducing your value. Think about this and tell me how you think it would work out or if you have a problem with it let me know and I'll be happy to help you walk through that thought process and change your mind of why you think you need discounts. You don't start saying no today. All right, thanks. I'm Donna Bordeaux, Pyop Account.
