Small Business Owners – Where Does the Discounting Stop? - Page 2
If you’re a small business with just a few employees, running a ‘too good to be true’ discount can suddenly put a huge strain on your resources. If you’re used to dealing with a dozen customers a day and suddenly you get 50 or more, it doesn’t take a genius to work out that demand could outstrip what you’re able to supply.
- You cheapen the perceived value of your product or service
As well as lowering your own prices, heavy discounting can cheapen your industry as a whole. Let’s say your closest competitor down the street is offering 70% with one of these coupons. The obvious reaction is to discount your own prices too in order to try to compete.
The result of this is consumers get a fantastic deal but you and your competitors find it harder to make a decent living.
The promise of an influx of new customers is appealing for any small business, but make sure you do your homework and consider the points above before offering a huge discount on your products or services.