One area that can really hurt your business if it is not executed correctly is discounting.
My businesses use discounts, but there needs to be a systematic plan for why you’re offering the discount and how it’s justified. As an example, Omega generally offer two day-specific discounts per week as that suits our customer demand and helps keep the phones ringing.
If you don’t have a reason or a discount strategy in place then a technician perhaps starts discounting to the wrong customer who then takes advantage of the situation and it can cause unnecessary issues. For example, let’s say your technician has quoted a drain replacement job for a customer at $5,000 across one and a half days. The customer proceeds to repeatedly ask for a discount and without a formalised process or reason, the technician finally agrees to do it for $3,500.
Can you see what is flawed with this method? You’ve arbitrarily devalued your service and instead of satisfying a price-shopping customer who doesn’t value your service you may instead agitate them. The unsatisfied customer could ask your company why you were charging $5,000 in the first place for a $3,500 job, which is another unnecessary problem you’ve created through a random discount.
There is a better way however of sensibly offering a customer a reduced quote in situations like this whilst creating a win-win for both parties.
Let’s use the above drain replacement quote as an example again. You’ve sent your technician to quote the job and the customer isn’t happy with the $5,000 total cost and asks for a discounted rate. Instead of agreeing to or even refusing this request, the technician instead suggests a supervisor visit the site and take another look at the work required. With a fresh set of eyes the supervisor can explain in detail to the customer the components of the $5,000 quote.
Perhaps the supervisor clarifies to the customer the cost of concreting is significant in both expense and time, with the concreting taking up half a day on its own. The supervisor then explains to the customer “maybe if you have a mate who could help you with concreting, we could cut that out of the quote altogether and bring it down to $3,500, plus it now would only take a day for us to be here” The customer may then say “sure, my brother-in-law would be happy to help,” and you now have a win-win situation.
You’ve offered the customer a reduced quote which means they feel like they’ve got excellent value but you actually haven’t offered a discount on your services! You now have a full day’s worth of guaranteed work for a satisfied customer and by eliminating the half a day of concreting have also freed up your schedule to dedicate to another job.
Always discount deliberately and systemically and you’ll continue creating win-win scenarios, otherwise it may not end well for your business.