Q. What is people’s perception when they see a company offering a discount?

A. Most people think a company is not doing well if it starts discounting. If you can afford that price now, they want to know why they can’t get a discount all the time (e.g. people wait for the January sales and never pay full price). Existing customers resent it if only new customers get the discount. Competitors get in a price war where they undercut each other until one goes out of business (e.g. BA and Virgin Airlines).

The only time I do it is if I get something in return that I want e.g. prompt payment. The difficulty is chasing people for the price difference later if they don’t keep up their side of the deal.

Discounting is fine for, say, a restaurant that’s quiet on Mondays to offer a free bottle of wine with a meal for two. But not if they offer it on Fridays when they are already at capacity and would be giving away something for nothing.

Customers are always happy to pay less, and don’t like paying more. But for the business, generally, no kind of discounting is good. If a client asks ‘can you knock down the price a bit’, just ask yourself ‘would I give this person £x for no reason?’

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