Discounting Discounts

You hesitate to announce a discount on your product. You’re debating this when it’s discount season, you’re debating this when sales are low.

You hesitate because a discount cheapens the perception of your brand. It attracts the wrong kind of customer. It might seem desperate.

But you also hesitate because you might get the nice signal that matters: revenue.

So here’s another reason to consider other options.

Discounts give you discounted information.

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What do you learn when you hold a sale?

You learn that a reduced price sells more products.
You learn that you can sell a product to new kinds of people.
You learn your stocks are lower and your bank accounts are higher.

But you don’t learn what caused someone to buy.

You don’t learn whether the product did its job for the customer.
You don’t learn if you could have still sold the products if the price had been higher.
You don’t learn that if you had a higher-priced (but higher-quality) offering, your customer would have hesitated between the two options, and would have chosen your lower option at the non-discounted price.
You don’t learn the mental gymnastics that went into the mind of the buyer before they finally said “yes, this, now”.

You can ask them their purchase story. But the quality of their story will be discounted. It’ll be discounted with an “I bought it because it was on sale”.

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When selling without a discount, you get better information when talking to your customers.

You’ll know which of your product’s attributes didn’t make a difference, in fact, that some of the ones you emphasized in your marketing actually caused people to hesitate.
You’ll know what your next version of the product should be like.
You’ll know how to talk about the product to the right kind of customers.
You’ll know how to avoid attracting price buyers, and instead how to attract better customers.

Some brands don’t offer discounts. They’ll offer gift cards with a purchase. They’ll pitch in extras. They might hold a clearance sale for old items. They might push old inventory through distributors who will sell at a discount if they choose to. They’ll tier their products in a value ladder, creating an option at an approachable price. They’ll confidently talk about the difference their product will make in the life of the customer. They’ll do all that because they know. Because they have a good sense of the jobs for which their customers hired the product.

If you hesitate, consider the option to hold out on the discount, at least for this round. And go out to learn about your customers instead.