Most Americans are always out for a deal. We all know the rush of pride when you get something for far less than its value. Accountants tend to be better at stretching a dime than most other groups. For this reason, it is very tempting to offer discounts, coupons, and other deals at your own firm. While there are definite upsides to this business practice, there can be downsides as well.
The Art of the Deal
There are obvious upsides to offering discounted services. New clients are more likely to choose your business than others that cost more. In addition, many can be upsold into buying more services at a fairer price. In both cases, the goal is the same: to turn a potential customer into a customer who pays full price – even if eventually. What could be the downside?
The Downsides of Discounts
There are several disadvantages to offering coupons, discounts, and other deals. First, most firms are already operating at a reasonable budget. You stand to operate at no profit or even take a loss in hopes of future sales. Second, many clients simply never convert to full price payers. Like dedicated Black Friday shoppers, some people simply never are willing to pay what an item is worth. This leaves many accountants at risk of working their tails off only to take a loss.
Last, there is a very real issue of perceived value. People who pay less for a product or service tend to view it as being lower quality. By offering discounted services, you are training customers to see your services as cut-rate. They may assume that what you consider a deal, or even a price that is functionally a loss to your firm, is actually what you are worth. Many people, for example, view a Mercedes as a better car simply because it costs more.
Using Discounts to Your Benefit
Accountants should be counting dollars, not chasing pennies. So how can you offer the deals that customers love without undercutting your own bottom line? First, introductory deals never work unless they are bundled to a package where you will actually profit. Americans are fickle consumers, so don’t bet on winning loyalty or upselling once your customers have gotten more than they payed for.
Second, use deals to reward good clients. If you have a good customer, consider offering them an introductory deal on a new service that could benefit them. Discounts can also be used to encourage good customer behaviors. Paying upfront, for example, is a practice that many firms reward because it saves later in billing and collections. Many companies also encourage the “good behavior” of referring people by offering a one time discount when a customer sends a new client your way.
Offering a good value doesn’t always mean offering a great deal. Train your clients to see your services as so valuable that they are worth every penny. Use deals as rewards for good client behaviors that you want to encourage rather than enticement to walk in the door. Undervaluing your expertise never pays off in the long run.