DISCOUNTING YOUR PRODUCT tells your customers several things:
- We don’t know how to properly price our products.
- We wanted to see if we could get you to pay this price first.
- We apologize for pricing it like this.
- We really need your business, so I’ll take a price dive to get you into this today.
- We can also discount service and parts.
- You’re gonna have to play the haggling game with me.
Are these good messages to be sending your customers? You may think you’re creating friends, but all you’re doing is training them to get the lowest price, in which case you’ll see their car at the jeweler down the road just as often as at your store.
I used to be caught in this fear aspect of discounting — in a way, apologizing for the price and trying to build a customer base by doing them a favor. I was giving away the store, causing cash flow problems, profitability problems and sending out all these signals I mentioned. We had trained our customers to expect a discount, and we had to retrain them to know that the price on the ticket was the price.
I discovered that the one thing we weren’t doing through all this discounting was adding value. We learned how to add value to all of our merchandise by finding out from the customer what was important to them. An easy example is Brenda and Mark coming into the store for an engagement ring. After some discovery questions, we learn that Brenda has to have a pear-shaped diamond and that she’s a physical therapist. Brenda says the important thing is that she has a ring that she doesn’t have to take off at work.
Armed with that knowledge, there’s no need for discounting. We simply design a ring with a solid, safe setting in palladium or platinum with a proper V prong or even full bezel set. How would it look if I designed exactly what she wanted, including casting and mounting, and then took off 20%? It wouldn’t make sense. If we know the customer’s reason for the purchase and why it’s important to them, price becomes no object.
Now when it’s really time to discount for legitimate reasons such as closeout or dated inventory, we can simply state the honest truth. Honesty about discounting lends credibility to your organization and can build your relationships. So, don’t apologize to your customers through regular discounts. Learn to sell them on the reasons that are important to them, and you’ll be a much happier jeweler.