There’s more to a discount than just charging less for something—there’s a deeper psychology behind it that can impact your accounting firm’s success.
Inevitably, your clients and prospects will ask you for a discount. It’s a part of human nature to, at the very least, ask the question.
And if you’re not prepared with your answer, chances are you will either:
cave under pressure or
be unable to articulate why you’re saying no and potentially damage your client relationship
Here are some of the reasons why discounting can do more harm than good.
According to GoProposal’s James Ashford, at this point, clients and prospects have already made the decision to sign with you and they’re simply looking for savings where they can.
But that doesn’t mean they should receive them. Here’s why.
When converting a prospect and/ or upselling to your current clients, you need to convey your value. You need to clearly communicate what you bring to the table, the results your clients can expect, and why your pricing is the way it is.
The moment you discount your services, all your hard work is wasted. You’ve devalued your services in a fraction of the time it took you to convey your value in the first place.
“By discounting, you’re devaluing your services. And you can’t raise your price back up.”
If you present your proposal, advise of your pricing and then accept a discount, you’ve immediately begun to erode the all-too-important trust your clients have in you.
It won’t take long before they question why you tried to sell at one price initially, but were happy with a lower price in the end.
As a result, they’ll second-guess every line item on your invoice.
On the other hand, if you’re constantly running promotional discounts, your clients will begin to question why.
Think of it as a consumer yourself. But comparing your accounting firm’s discounts to something like a department store won’t do it justice. Yes, a half-price t-shirt is appealing, but your firm isn’t comparable to a store—it offers long term investment. Think of it like a car dealership.
Is a half-priced brand new car as appealing as a discounted t-shirt? Or is it concerning? You’d be right in questioning the half-price car’s quality. You’d be right in asking "what’s the catch?"
That mentality is similar to discounting accounting firm services. People’s finances are a serious matter—for some clients, you’re dealing with their livelihoods. You want to assure them of your value, and they may begin to question it if you’re constantly running promotions.
It’s simple: the minute you give a client a discount, they’ll wonder how much more they can save next time or on other services.
Instead of focusing on your value, they’re now focusing on where they can make their next saving.
When you price your services correctly based on your value, you must do so with confidence. Believe in your firm’s worth and the value you can bring to each of your clients through your services.
So when clients do inevitably ask you for a discount, you can confidently tell them, “No, but I can’t blame you for asking.”