Clients asking for discounts, how do you deal with it?

**TheWorks** · 12-10-2010 07:05 PM

My price is already low and I try to keep it low even though I have new costs they dont know about it. However some clients are bringing me businesses and extending their orders.

So if a client decides to continuously order from me and is giving me new clients is it only right to offer a discount? what do you think?

**Peter Picnic** · 12-10-2010 08:12 PM

Hi, if your pricing is already low compared to market rate then your prices should be fixed. Even if you are getting more clients, at the end of the day if you based or brand your business on low prices, this will lead to a race to the bottom i.e. everybody is undercutting each other and in this war of attrition, everybody loses.

Rather than push your clients away, think about how you can add intangible value to your clients such that if your pricing were higher but everything else remains the same i.e. ceteris paribus, they would still buy from you. Some ideas I can think of is delivering on time, good customer service. More specific ideas will have to depend on the nature of your business.

Best,
Jeremy
peterpicnic.blogspot.com

**tom-knox** · 12-10-2010 08:37 PM

Aim to add value without adding costs, glam the product up and be honest with your clients, let them see how great their savings already are. They'll see sense eventually

**Mike Hay** · 12-10-2010 11:45 PM

If cheap is the only thing your customer is loyal to, you've already lost them, you just dont know it. As soon as the next cheapest guy shows up, they will jump ship and leave you with a business that is under capitalized and driven into the ground without the ability to fix equipment or pay the tax bill. A broken company that now has no customer. You need customers loyal to your excellence.
I have always found that if you make busines purely about business, you will have a lot of competition. If you make business about relationships, you will never have a competitor, no matter how cheap. So. Change your focus and do it now.
Focus strictly on building relationships, friendships. Ask yourself this, if your friend was selling something and another guy showed up offering the same thing to you, but for .05 cents cheaper, would you be willing to lose a friendship for 5 cents? Of course not.
Behind every business, its just people.
When it comes to small business, dont hide behind your product, price or logo. Instead, be its champion and let it hide behind you. Fight for your business, and fight for your price and dont ever be ashamed of being the premium company that charges a little more. BMW sure isent ashamed of excellence, and no one questions why the price needs to be slightly higher then hyundai.
Lastly, not everyone will be your customer. Accept this with grace. There will be a customer for every product and at every price range. Choose wisely who you want for a customer. For some, there is never going to be cheap enough, for others, only the best will do. I even know a lot of people who without even doing a product comparison at all will always go for the one priced in the middle because "ya dont want the cheap one, and the expensive one means your only paying for the brand"
hope this helps.

**DayTrader** · 12-11-2010 12:41 AM

Even if your prices are already low, clients will always ask for discounts and freebies. They will not happy if you do not give them anything in return for their loyalty to your company. If you cannot give discounts anymore, why not offer a freebie in exchange for a certain amount of sales. Or a raffle promo wherein they can have a chance to win something.

**harry7007** · 12-11-2010 09:59 PM

I wouldn't, I give discounts to friends and family but nobody else, unless its a promotion, and those are always limited time offers.

**Peter Picnic** · 12-11-2010 10:15 PM

Don't compete on price. Try and build relationships so that they will want to buy from you

Best,
Jeremy
peterpicnic.blogspot.com

**swimdiva** · 12-12-2010 11:22 AM

Sounds like you have already established loyalty with your customers, and they want to be rewarded for sending new business your way! This is a great thing

Develop a customer referral program. Hand your loyal customers 5 business cards and tell them to write their name on it, pass on the great experience they had with your business and when a new customer comes in that they helped generate, you will give your loyal customer a $ credit to use on their next order. You can track this in your POS system or by excel, or even on a piece of paper near your books. You can also post a "referred by" card that people can print directly from your website and the new customer can write in the name of the referring friend.

This program will read better with your loyal customers - as you are not prostituting your products/services. Prices are what they are because they need to be. You already mentioned you were price competitive - so you know your customers are with you due to your price and service.

Market the Program:
Roll out the new referral program with a mailer (in an envelope - not postcard!) letting your BEST clients know that they will now receive Kick-Backs from new customers they bring your way, and here is how it works... Make sure to include 5 business cards with the customers names already written on them. For the few loyal clients that have brought you a few new customers, tell them you have credited them X-amount (does not have to be allot...$25?) for previous referrals and because of them you are rolling out this new program to show your appreciation to them for spreading the word about the wonderful job you do!

People want appreciation more then they want deals. Clients are willing to pay for our products when they are delivered with great customer service and true appreciation. I have a 90% referral rate from my clients, we are full price year round. However, I send out Thank you cards from every purchase, thank you cards to the referring friend of my new customer... If someone spends $1,000 with me, I send them a free gift in the mail a few days later. Maybe something they passed on in the store but I know they liked. (Costing me $25 - $50 wholesale...) People love this - it makes them feel like more then just a customer of yours. And it is more heart felt then giving 15% off...