Do you give discounts?
Thanks to Natalie Bolton from Lion Eyes Television for telling me about this amusing video.
It's fun to watch - and it raises some important issues about pricing and customers for creative businesses and cultural enterprises.
If customers believe they can get a discount from you, it's because they think they can go elsewhere and get the same thing cheaper. If they can in fact get the same thing cheaper elsewhere, then you are in a marketplace with lots of competitors offering similar products or services, all competing on price. So you are in a poor negotiating position. It's a losing battle.
Instead, build your business around those goods and services at which you excel in relation to the competition. Better still, focus on your uniqueness, providing goods and services that nobody else can. Customers will then have nowhere else to go and your negotiating strength increases dramatically.
To do this requires an understanding of your competitors and your market positioning. It means that you need to choose your customers carefully, selecting those people who want what you can uniquely offer.
So be prepared to say No when people ask for a discount. Only the wrong kind of customers will walk away, which is good because you can never build a thriving business around them. The right kind of customers - the ones who recognise the how special you are - will pay the price. These are the kind of customers to build your creative enterprise around.
- What's your business policy when it comes to giving discounts?
- Do you know how special you are? In other words, do you know at which products/services you excel in relation to the competition?
- Do you target those only those customers who want what you are especially good at?
It's only when you have devised your own unique business formula, based on your speciality and your special customers, that you can say No to customers asking for discounts.
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Discuss this with other creative entrepreneurs on the Creative Enterprise Network.
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