Discount your relationship when you discount your product.

You're a customer. So you obviously know what it takes to get you to buy.

But do you really?

"Give me a sale, and I'll buy".

Sometimes. What if you don't need the product.

My wife has 15 pair of shoes and she'll buy another pair next week if they're on sale.

Aren't shoes always on special? With that logic, she should be Imelda Marcos.

If you put stuff on sale, customers always show up.

You're right. But is that the customer you want?

A customer is a customer is a customer.

Ok. Imagine you're a shoe retailer.

My wife would be my best customer.

And you have an exclusive line of shoes. No one else can get them anywhere.

Well that's different.

Not at all. But let me finish. You have one exclusive line and then to fill up your store, you have all these other brands that everyone else has. Would you discount your exclusive line?

Only when the new line would come out.

So you'd leave them at full price until the fashion changed.

Yup. But to be competitive, I'd deep discount the other brands to get traffic through my door. Once inside the customer would see the exclusive brand and might pay full price.

That could happen. More likely, here's what will happen. The customer looking for a deal, will come in. If they find the right shoe, in the right style in the right colour and they feel the price is better than elsewhere, including Amazon, they might buy. They may even try on the exclusive, expensive shoe, never with the intention of buying them.

Why would you say that? They are a customer.

There are two types of customers. The ones who love you and the ones who use you. I call them "bottom feeders", always looking for the best price. 

But they are still a customer.

Yes they are. Although extremely less important.

But I'd have traffic.

Sure you would. Now imagine that customer who loves the store decor, the customer service but most importantly that line of exclusive shoes comes in your store the day you have a huge inventory clearout. Your staff is working off their feet, trying to sell discounted shoes to a bunch of customers who may not even buy. What would be the level of service to that customer?

We'd do our best. My marketing worked. We'd be too busy to give them the same level of attention that we'd normally give.

Exactly. Then what would happen?

She'd come back next week when the store calmed down.

That's an assumption. You're probably right. But maybe she'd find a new style somewhere else. Maybe you'd run these specials so often that she'd grow tired of your inattention. Maybe she'd divorce your company.

Well it's just one customer.

Yes. One nameless customer who paid full price for an exclusive brand traded in for a bunch of nameless customers who only used you for your cheap shoes.

I'll take it. It's all about growing the business.

Sure. Now assume your competitors start the same tactics. They're going to react to your discounting. They try keep their business. So they run deep discounts too. Now you're all fighting over the same customer with the biggest stick being the lowest price. Who wins now?

No one. We all lose. 

Not exactly. The company that wins is the one who found your client who wanted an exclusive brand who was willing to pay full price. The company that wins is the one you gave your client to.

How long does it take to realize this is going on?

Business is not a 50 yard dash. It's a marathon. It takes time, commitment, attention. If you cheat on your training in a marathon you won't finish. You'll lose. If you start by sprinting, you lose. If you don't feed yourself, you lose. If you don't have the right mindset, you lose. If you don't hydrate, you lose. Some conditions are in your control and some are not. The point is recognizing the difference.

So discounting isn't good for business?

I didn't say that. It's good for short term business. It's good for clearing out discontinued, perishable inventory. It's good for moving sales. It's good to put money in the bank this week. It's not good if you want to be in business longer than a couple of years.

So know this, why would people discount?

I think it's one of two reasons. Either they disagree with what I've told you or they are addicted. Can't trust an addict, they'll do anything for their next fix. What happens to an addict after longterm continued abuse? 

It's not good.

There you go. Now you're getting it. 

So how do you bring in those clients, without discounting?

How long have you been married?

Twenty four years.

How did you get your wife to marry you?

Two years of persistence to get her to go on a date, followed by two more years of courtship.

So it wasn't easy.

Nope, but it was well worth it. The good times far outnumber the bad.

See you already know the answer. Just use the same thinking it took to marry your wife.