Many experienced entrepreneurs would tell: "Never discount your own product".
And there's a lof of strong reasoning behind. Besides obvious economy implications of discuonting your product or service, there are some psychological, that could be not so visible.
Giving discounts:
reduces the value and quaity perception overall.
creates a "precedent": if you were able to provide services or sell a product at a lower price once, then you can do this again.
lets a customer see that negations are possible and they likely have an ability to influence any part of your service/product delivery process.
defines your positioning vs. competitors and could permanentelly drop you into a lower price category.
But many tend to ignore advice and find out the truth through own mistakes, I did it exactly this way throught my career — learned this idea in a hard way.
Do discounts are essential to get first customers at your go-to-market?
It is hard to get first clients when you're just starting:
You have neither portfolio nor reputation.
Your network is small.
Your lead funel is empty,
You don't have enough skills and experience to persuade a customer.
And it looks like an obvious option to offer discount as a leverage:
Drop the price to grab attention.
Include as many options/features/services into your package as you can to make your offer competitive.
Promise the same quality at a lower price.
Wrong. Emm, no. A disaster.
While attention is probably yours, there are troubles right away:
Explaining "same quality at a lower price" without portfolio is almost impossible.
"Same quality" is a lie. You aren't that good yet.
Your operations and management will likely be a disaster.
You will likely fail in delievering quality for all the options you promised.
The customer will be very cautious and picky by default.
The customer will feel superior:
"He needs us more then we need him."
"We make him a favor by agreeing to hire."
"There are chances he'll fail. We'll put more control."
"That guy is just starting. We'll teach him how to do business."
"There should be something wrong with the outcome. Let's find issues."
Any issues during the process will have double impact, while you work at a half-price:
You will burn out faster as there's less financial motivation.
You could be disapointed by the whole thing if complexity, workload and timings significantly exceed your expectations (and they most likely will).
Eventually, you'll find yourself exhausted and broke despite a titanic effort you've put into such projects.
All this sounds bad.
Too bad to even making a try.
And now you think:
"Fck it. I'll build perfect product/service first, before selling anything".
But no. You won't build a perfect product or service by cooking it at your safe and cozy bedroom, without facing the real, hursh world.
"Wtf!? Did I just read this whole thing to understand that Discounts are suicide, Don't use them, But there's no workaround?"
There are workarounds. Or let's better call them "Strategies".
The drama I put here is to emphasize the consequences.
I've been there, so you probably shouldn't.
Then you decide which way to go.
In the next posts, I will explain three fundamental approaches here:
How to use Discounted Pricing strategy wisely and not regret it later?
How to model and price your products/services to sell easily and stay profitable?
How to go Price-Premium and don't sit without customers?
Each approach has many possible strategies.
They could intersect.
But first, let's answer the key question in a practical way:
How to get your first customers without offering discounts?
PS.
Remember.
There are no "laws" in building business.
Nothing is permanent.
Stay flexible while reading and creative at implementation.
Max.
