Growing up in an Asian ethnic enclave, I know all about discounts. At times, it’s part of the culture. Even when I was visiting China, a buyer could automatically presume that the proposed price given at markets is 10x its real worth.

No joke.

Personally, I hate dealing with people who ask for discounts. It’s insulting, but it happens. Additionally, if you want the job badly enough, you might discount as well in fear of losing the gig because of a small difference.

  • How can we deal with discounters?
  • What are the repercussions of offering discounts?
  • But are discounts that bad?

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Product Desirability

A buyer’s state of mind at a point of purchase definitely comes into play when assessing value. If he or she’s on the fence about buying your product, then this person will likely play some games to see what they can get for a minimal price. This is where you have to consider whether discounting is worthwhile.

For an uncommitted buyer, walking away isn’t a big deal. For those who aren’t sure that they want it, the loss of the opportunity to get what you’re offering isn’t as painful as it is for someone who’s wanted it for a long time and now can finally purchase it.

In other words, if someone has his or her heart set on your product and literally cannot wait to acquire it, then the buyer is less likely to haggle much over terms and pricing. To form a relationship early on, read about content strategy or the book TRUST.

central park mall

It’s a pain in the neck to deal with the people who demand a discount, but the fear of losing out on potential work can be motivating, especially if a job looks like it has portfolio potential. Am I correct?

And if a house payment, medical bill, or other daunting expense is stressing you out, the guilt for not taking a gig, even if discounted, can be nearly crippling. But keep in mind that barriers add value.

Discounting removes barriers, thus removing some perceived market value for your product.

boba

Barriers Add Value

Well what about Groupon, you may be thinking … or the extreme couponing mania and other discounting trends? Discounting seems to really light the fire under some people and create a selling environment that’s hot.

I say, sure, on the surface Groupon is indeed a form of discounting. But this company uses two powerful strategic barriers:

  1. time limits
  2. and scarcity

The company also utilizes the power of social proof — everyone wants in — so it actually heightens the general appeal of items and services.

carnegie deli pastrami

If Groupon removed those barriers and allowed consumers to buy whenever they want and as many as they want, customers might wait until next week, next month, or next year to buy something … or never actually buy. It all becomes unimportant.

Think again about your business objectives and your target customer, and make sure your pricing and policies align to help you reach your goals.

Story: The Ultimate Discount

In 2010, I was invited by WPPI to speak at a business panel for photographers. A budding photographer had a predicament.

“I’m new. I didn’t have a portfolio, so I asked 30 of my mommy friends to see if I could borrow their kids to use as sample work,” Sarah told me.

“So what’s the problem?” I asked.

Sarah’s voice started to escalate, “The problem was when I finished the shoot, many of them started demanding that I edit this, edit that, print this, and print that. They treated me like I was chopped liver! I did it for free!” She continued, “What more do they want? What’s worse is that I didn’t get the portfolio I wanted.”

children photography

“That is troubling,” I tried to console her. “The issue here is the lack of barriers to entry. When you are too easily attainable or, better yet, too desperate, people will step all over you.”

“But I had no portfolio! And I still DON’T! How can I not be desperate?” Sarah asked almost furiously.

“I understand. It’s actually a matter of words and presentation. Let me propose a different technique.” I thought for a moment. “What do you think about this way?”

I started. “Hello mommy friends! How are you? I’m trying to build my portfolio as a children’s photographer. I don’t have any sample work yet.”

“Uh huh,” Sarah looked flummoxed.

I continued, “So, I am reaching out to the 30 of you first since you are all my friends. If you want a complimentary children’s photo session by me, this is what you will have to do:

  1. Send me a photo of your kid
  2. A short summary as to why I should pick him or her
  3. From the submissions, I will choose 5 lucky kids

Thanks for your time! Signed…you, Sarah.”

family photography

Sarah’s jaw dropped. The technique was simple. I turned the table around by adding barriers to entry. I made it seem as though Sarah did not need them, but they need Sarah. Let’s recap.

  • Sarah is reaching out to you 30 first, meaning that there are many others who would gladly do this, well, because it’s free
  • Of the 30, Sarah will pick five
  • Moms need to send a photo of their kids, you know, to make sure that they are cute enough
  • Moms need to submit a summary as to why Sarah should grace them with her talent

That’s a lot of barriers, I agree, but this is for free. It’s the same offer, but when presented differently, it makes a world of difference.

Next: How to Make Discounting Work

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Yours Apple fan,

Lawrence Chan

P.S. A lovely note from Alicia Haskew about my pricing e-book.

Seriously — Your books are like King Midas for photographers!

Everything you write has turned into gold for me!

Read more about this rewritten 2nd edition pricing e-book HERE.

Or …

[price-item item_number=”2″ category=”pricing ebook”]