This week, let’s talk discounting…specifically how to be strategic with it instead of just throwing out discount after discount, hoping that results in a steady stream of clients.
Discounting is a hot-button issue for a lot of therapists, and there seems to be two extremes on the subject. On one side I hear therapists screaming to never ever ever discount no matter what or you’re completely devaluing yourself and the entire industry. On the other side I hear therapists discounting every time a client asks, or running Groupons or other massive discounts to their services with no strategy or reasoning to it other than that cheap massages sell and they need clients NOW. But I think it’s important that we all land somewhere in the middle on this. Discounting is not necessarily a bad thing in and of itself, but if not done strategically, it can be detrimental to your business.
So here’s 3 keys to ensuring your discounting is strategic instead of desperate.
1) KEEP LONG-TERM GOALS IN MIND
A big problem with running discounts is that it’s often a short term fix for a bigger issue. Maybe you’ve gotten yourself into a tight financial situation and you need some clients in the door right now. Or maybe you’re not seeing much success in other marketing efforts and this is just easier and faster. Whatever the reason, if you’re not keeping those long-term goals in mind you’re likely putting a Band-Aid on a gaping wound in your business rather than using discounting as part of a real marketing strategy.
2) CALCULATE YOUR ROI
Discounting IS an investment. I know many may not see it that way, but it would be no different than any other marketing expense. You’re taking some money that otherwise would go into your pocket and using it in hopes of getting a long-term client, right? A lot of people don’t even see discounting as losing money, but it is. If you charge $60/hr and discount to $40, you’re spending $20 to make $40, and that doesn’t even calculate in your direct and indirect expenses associated with the service.
Because of this, you need to calculate your potential ROI the same as you would any other marketing expense. How much are you investing? How much can you realistically estimate to profit from this in the long run?
3) HAVE A PRICE TRANSITION STRATEGY
You don’t want to keep those clients at a discounted rate forever (more than likely) so have a plan to turn them into full paying clients. This needs to be done before you ever even offer any sort of discount, not as a last minute resort when you’re desperately trying to get someone to pay full price.
Think about ways to word the conversation with them on this transition when you’re trying to rebook at full price. Think about a possible scaling system to work them up to that full price, or offering a package so they’re still saving some money. Get detailed about a real strategy surrounding this transition. This is crucial to keep those discount clients from only coming once for the deal.
What’s your take on discounts?
Are you being strategic with them?
What’s your transition strategy?
Answer these before you start throwing discounts around.
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