And when it does not.
WHEN IT WORKS
Clearing stock that will not otherwise sell Encouraging a larger order Rewarding an established customer Filling capacity that would otherwise be idle
WHEN IT DOES NOT
As a substitute for explaining value To match a cheaper competitor Routinely, so customers wait for the discount
THAT LAST ONE
Regular discounting trains customers never to pay full price.
Your normal price becomes the one nobody pays.
WHAT DISCOUNTING COSTS
A discount comes entirely off your margin.
A ten per cent discount on a thirty per cent margin removes a third of your profit.
THE VOLUME QUESTION
A discount only makes sense if it generates enough additional sales to compensate.
Calculate how many more you would need. The number is usually larger than expected.
WHAT TO DO INSTEAD
Add value rather than reducing price.
Free delivery, an extra item, faster service.
Those cost less than the equivalent discount.
