The Damage That Discounting Can Do to Your Business

So, how do you get around this problem, and what can you do instead of offering discounts? The first thing to say is, if your model has relied on discounts up until now, I certainly wouldn’t suggest stopping them immediately. Instead, phase them out. Start giving smaller discounts and freebies to customers, such as on-site services, meals, a bottle of wine… anything that makes them think that they’re getting something extra on top of what they’re already paying.

Then we come to advertising. Most business owners think that an effective advert has to contain some sort of offer. Not true. It has to contain value, and discounting is the lazy way of doing that. Maximise on what you’re offering. What makes your business great and unique? Focus on that when delivering your message.

And that leads us nicely onto your value proposition and how you should use it to target your ideal client. I’ve already written about the importance of finding your target audience (you can check out that article here), and part of that knowledge comes down to knowing what they want. Like I’ve said before, you shouldn’t be looking for clients who simply want the cheapest deal around. Your clients should be more concerned with the quality you can deliver. In our case, that quality is great customer service, top attractions and a good location. Having all of these things, and working on them all the time to make sure their quality is maintained and always improving, means we never have to think about discounting, because we know that we’re offering something that our audience wants and values, and we’re telling them that with targeted advertising.  

This combination between quality and knowing your target audience means that you will also create a loyal customer base who return every year, and tell their friends and family too.

In order to avoid discounting, you need to have a plan in place. As I said, discounting is the easy way out. Make a plan that includes marketing, pricing and quality control, and stick to it. That way you’ll never have to offer another discount again, and your customers won’t even mind.    

Traditionally, discounting products, services and packages has been commonplace in the accommodation industry. There is an expectation among business owners and customers alike that this is the done thing.

Because of the wide use of discounting, it’s become indoctrinated into the psyche, especially in the accommodation industry where’s it’s believed that successful businesses need to bring in as many people as possible… at whatever cost.

You may not be surprised to learn that I don’t think this is a good idea. Not only does discounting drive down your profits, it also damages your brand, making it only appeal to those looking for the cheapest offer out there. This gives you a reputation that won’t help in attracting mid to high-end customers who are happy to pay a bit more for better quality.