Dennis H. Lewis argues discounts devalue your product and spread like a contagion: once you cut price for one customer, it's hard to stop. Instead of discounting, increase perceived value. SaaS companies often offer 30% discounts habitually, but there will always be customers hunting for a cheaper deal.
Chapters
You've been a strong proponent of not offering discounts. Yeah.
Why is that?
First of all, they're contagious.
What does that mean?
Once you've done one discount for one customer, it just is a downhill fall from there and you're devaluating yourself. So my thoughts on discounts are if somebody is on the edge and you think they're going to be worthwhile to work with them, increase the value without increasing the price, but don't give them a lower price and stick to your guns. That's, you know, this is my line. It's your business. You're the one who's the only one who can establish the value of what you have to offer. If the market doesn't recognize that value, then you, you should consider what you're doing wrong. But if it's just a case of somebody trying to get a little bit extra out of you, give them a little bit more instead.
A lot of SaaS solutions that I personally know of, for example, they're really good at ongoingly offering discounts. Like it's rare for me to, to bump into a lot of SaaS solutions that aren't offering like a, hey, 30% discount on their site. Always, all the time. It's almost impossible for, for me to.
To come across some of these solutions.
That aren't offering a discount.
There, there was a long time ago, there was a politician, I don't remember who he said, who it was who said, I promise that every person in the country will have an above average salary. Well, being a mathematician, that makes me laugh because by definition, if there's an average, there's certain number above and certain number below. You can't have everybody above the average. There wouldn't be an average that isn't an average. That's just changing the median at the very least. But mathematics aside, there's always going to be a market for the cheap customers and for the cheap products. It's just a question, do you want to be in that market? Those cheap customers are the ones that are going to be looking for those discounts.
