On the need for discounting clarity and why we need to talk about pricing

the price you have to pay

I can take my seat on an airplane knowing the likelihood that somebody sat next to me paid less and the person sat in front of me paid more. It’s down to economics, supply and demand. It’s something we, as paying customers, may not like, but at least we understand. Shop early. Get rewarded. Shop late, run the risk of paying more or less.

What about the products you sell? How does the inner workings of supply and demand impact how you price and how you discount?

The struggle you face building customer retention is price consistency. The trend towards first-purchase discounting makes those key second and third purchases an uphill struggle.

Your customer expects similar or further discount.

Unless you justify otherwise.

That justification is achieved through price clarity.

Setting out your pricing strategy in a transparent manner that your subscribers will agree to. They’ll get it. Why? Because they’re human. We like things explaining simply and honestly. That forms trust.

If you don’t discount… explain why you don’t discount. Explain how your brand has priced your products fairly and competitively. More importantly, empathise with the skeptic. We humans don’t like the feeling of being ripped off. Explain how, through your pricing policy, your customer will shop at the same price as the next customer.

If you do discount… outline when and how. Talk about your one-time yearly sale where you clear the warehouse of products that failed to sell in the volume you expected. Explain why you discount. Explain the importance of using a discount on a first purchase to motivate people to shop. Explain why you reward early-adopters of new products with incentives. Just explain your strategy. Explain how you believe in the importance of rewarding loyalty.

Whether you discount or not, present a level playing field. Take ownership of your pricing strategy and make it as clear as you can why you’ve taken the route you have.

There’s no bad way of doing this. Correction. There is a bad way of doing this and it’s by not adhering to your pricing promise.

So make sure you put forward a proposal that your customers will be happy with and one that suits your own business model.

I talked the other week about how Bellroy don’t pitch the ‘sale’. Instead they explain the reason behind the discount.

Frankly, the quicker we can move the conversation on to product value over product pricing the better. It gives you something you can talk about from the heart. It makes sending emails a lot easier when you haven’t the need to check the archives for prices you’ve pitched in the past.

Pricing and discounting is a sore topic. It’s a conversation you feel uncomfortable having. Unless of course you have an honest policy that suits all.

Written By:

Ian Rhodes


First employee of an ecommerce startup back in 1998. I've been using building and growing ecommerce brands ever since (including my own). Get weekly growth lessons from my own work delivered to your inbox below.

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