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Top 3 Dangers of Discounting

Top 3 Dangers of Discounting

Every good horror movie has its signature music that tells you something bad is about to happen. The music starts with a slow ominous rhythm, and then builds to a climax that announces the arrival of the monster or killer.

JAWS. Halloween. Psycho.

You can probably hear those unforgettable notes as you read this.

Businesses do the same thing with their marketing strategies. Things like “loss leaders” are intended to create a sense of urgency and boost sales.

But like any horror movie, there are always dangers lurking in the shadows when a business discounts its products or services.

Just like with those classic movies, here’s the “Part 2” that I promised from our conversation about the gas station owner who offered an unprecedented $2.50/gallon discount for a 2-hour window last week.

While I wasn’t one of the drivers who got into that incredibly LOOOONG line (we talked last time about why I hope no other business owners or their employees did either) …

Let’s unpack a few of the dangers of simply offering a massive attention-grabbing discount and expecting a windfall of sales and new customers.

Here are three of the biggest dangers of discounting (and what to do instead):

1. Driving “transactions” and instead of creating “relationships”.

Let’s be real for a minute. It’s 2022. It’s easier than ever, and it’s almost expected, that to get discounts of any real magnitude, people understand that there needs to be some way for a business to have a path to recoup lost margin.

In the gas station example, perhaps this would be joining a text club or email list. Either of which could happen in seconds with a QR code or staffing the pumps for this short window of time.

Sure, the cost to run the promotion marginally increases, but the opportunity to bring customers back is infinitely greater than that small investment.

If you don’t run a business that is built on driving repeat traffic to a physical location, the same principle applies.

Don’t discount without a clear and simple plan to re-engage your new customers to future products or services at sustainable margins.

2. Missing out on easy and logical ways to immediately capture sales of non-discounted items.

This is a big one.

Bundling other products or services alongside (or instead of) the discounted item is often forgotten. Perhaps the most obvious in the gas station example would be to upsell a car wash along with the cheap gas.

The idea of saving $10-$25+ on the fill-up already creates a sense of “playing with house money” that can then easily be spent on items that feel like a splurge, such as a $7 – $15 car wash.

What if the owner doesn’t have a car wash on location? We’ll cover that in mistake #3, but before we go there…

We know that gas stations don’t make money on gas. It’s all about getting people to come into the store and buying their marked-up convenience items.

If I had a line of customers that stretched for miles, you’d be darn sure I’d have featured items in the store to increase how many customers came inside to get it.

Why not have a staff member walk by the cars in line and hand out a coupon, voucher, or flyer to help make sure they do come inside?

More than zero of the cars in line will have an extra person in the car who could easily spend time buying items in the store while the driver is in line for gas.

Again, taking this outside of the physical store use case:

Maybe I offer a discounted tune-up on an appliance or equipment in a customer’s home…

A first-time special on landscaping or pest control services…

Or a free estimate, inspection, drain clearing, or any number of one-time or seasonal services, etc.

Each one of these represents an opportunity to get into a customer’s home to not only make a great first impression, but also to show how you can serve them by assessing other needs they have now – or in the future – to establish the trust that will lead to sales at full rates.

3. Not leveraging joint venture opportunities.

Most businesses simply ignore, or don’t even consider using, a joint venture to maximize the exposure and to co-invest in the discount strategy (and thus preserve some of the margin lost from the offer) …

I researched the news story that hit our local station for the gas station. Turns out, they did “team up” with a local political group who was looking to use the gas discount offer as a means to draw attention to the group’s efforts to initiate legislation geared toward improving economic policies.

I can’t speak to what arrangements were or were not made to help the gas station owner, if any, but assuming that most businesses may not want to explore political partnerships to drive sales, here are a few ways to use joint ventures that often go overlooked:

Let’s look at the car wash example I referenced earlier.

Maybe the gas station doesn’t have a car wash on site…

How easy would it be to partner with a car wash to provide coupons or vouchers to everyone who bought at least 5 gallons of gas to get a car wash from a nearby location?

The car wash company gets the benefit of exposure to a huge number of customers driven by the traffic generated by the cheap gas, and the gas station owner (should) get compensated for each redeemed and/or distributed voucher.

One more time for those who don’t run storefronts…

Let’s say I’m in a customer’s home providing a discounted repair, and I notice that they need to have their flooring replaced or repaired… why would I not partner with a flooring company to distribute vouchers, flyers, etc. to everyone I see for my discounted repair?

Bottom line? I’m not a big advocate for offering discounts, period.

In fact, there are many other ways to get the same outcome (more sales, leads, or customers) without discounting…but I recognize that there are circumstances or industries where it is more difficult to avoid entirely.

Customers will pay twice the price if they believe they’re getting four times the value.

If you choose to discount, follow the steps above so we can hear hero anthems (Superman, Wonder Woman, Indiana Jones) instead of horror music when we look at your bottom line.

Gas Prices Got You Down? Don’t Make This Mistake

Gas Prices Drop

How much is your time worth?

With how much gas prices have risen, along with most everything else, it is incredible what some people feel compelled to do to save money.

True story:

Just a few miles from where I live, an enterprising gas station owner decided to slash the price at the pump by $2.50 a gallon for two hours in the middle of the day, starting at 11am.

Naturally, the line of cars stretched around the block, through the neighborhood, and then some. The scene at 10:30 was absolutely bonkers, which is when this picture was taken.

Of course, I can’t help but put my entrepreneurial lens on this from two different angles…

Let’s start with the consumer, or the CEOs of the lives of the people driving the cars in line.

I don’t fault anyone for their interest, or even a felt need, to save fuel costs where they can. People are hurting, I get it.

While there are extremes at both ends of the spectrum that can perhaps affect this equation…

Such as someone who has a 30 gallon tank (RV’s were not eligible, haha) that was running on fumes and was also at the front of the line / waited the least amount of time (likely no less than an hour and more likely closer to two hours based on how long the line was at 10:30)…

Or the person who topped off 4 gallons, but was at the back of the line, waited the longest, and was the last one to make it before the cutoff at 1pm…

We might say savings ranged from $10 – $75, but on average, people were likely to save around $25 for, let’s call it, an hour or so in line…

I hope that any business owner, or employee driving a company car, who drove by that line knows how quickly the math gets upside down and I’m sure went right on past without taking a second look…


Where else do business owners step over a dime to pick up a penny?

Usually a product of the earliest stages of a business when cash is tight, too many business owners hang on to far too many tasks that need to be either delegated or outsourced.

They underestimate the value of their time, and they also underestimate the value of their skills, expertise, and services.

And it’s not just about the monetary value of their time.

It’s also about the intangible value of their time.

The opportunity cost of not spending their time in other ways is simply too high.

There are things that the business owner can uniquely do for their business that no one else can, and the “hourly rate” for their time is a multiple of what it would cost to outsource those tasks that keep them occupied.

From bookkeeping to, ahem, marketing..

From administrative tasks, to even cleaning the shop (or even their own house!)…

Too much growth is held back by the death grip on way too many parts of the business.

When was the last time you took a close look at how you’re spending your own time as the business owner?

Identify opportunities to delegate and outsource, and unleash the growth that awaits…

Is that list too long? Pick 2-3 and make a plan to solve for them this week.

If you’ve got people managers on your team, now might be a good time to have them do the same. See what they bring to your attention.

They’ll appreciate the opportunity to get creative, and you just might learn something about your team based on how long (or short) their list is…

Need help brainstorming? Drop “TIME” below and we’ll get you on the path 🙂

Keep an eye out for when we’ll dive into the gas station owner side of this experience!

What Can Any Business Learn From One Gynecologist?


Yeah, I know.

Now that I have your attention.

If everything about running your business is rainbows and unicorns and will always be so forever and ever no matter what happens…

…and you’ll never need to do anything to change or adapt to things like technology, customer preferences, social dynamics, or even something as unexpected as a pandemic, then feel free to skip this and go on scrolling about your day.

Or, check this out… 

In my line of work, and because of where my career has taken me over the past 22+ years, I find that I spend more time than the average bear looking for ways to apply the best of one situation or industry and apply the principles to another seemingly unrelated situation.

That’s why I couldn’t help being fascinated by a viral story that stemmed from one gynecologist, Dr. Ryan Stewart (you can find him on Twitter, @stuboo), who – in preparation for opening a new office he intended to design from scratch – took to the twitterverse to ask a few simple questions. He said:

“I’m asking women. How would you design/optimize a visit to the gynecologist’s office?

  • Problems
  • Frustrations
  • Solutions

No detail is too small”

The responses uncov..  offered some incredible insights. A few quick samples:

  • Adjustable thermostats in patient rooms
  • A signal to let health professionals know you’re done changing
  • Changing room inside the exam room
  • A layout that prevents overhearing private health conversations
  • Pay attention to the angle of exam beds, they shouldn’t face the door

There were so many more, and I won’t go into depth here as to why any of the above ideas – or any of the suggestions – are better than the others. I haven’t visited an office myself to have any qualitative opinion on their individual or collective merit, however, I do know this much…

There really is no substitute for good ol’ fashioned customer research!

“But what if I don’t have a way to get feedback like this or am not comfortable with posting these sorts of questions about my business online?”

“That all seems easy if you’re starting from scratch, but what about someone who’s been in their business for a long time?”

The real answer is to find a way to get it done anyway. 

Whether on your own, or by getting help from someone (like me, perhaps?), craft a plan to collect some customer research. 

There are SO many easy ways to do it, but you’ll want to be mindful of avoiding biases that can skew your results in ways that keep you from getting the insights and answers you really need.

A few fundamentals to consider:

  1. Ensure the format or approach you use enables the responses to come in unfiltered and free from candy-coating. If you call your best customers and talk to them on the phone, that’s better than nothing, but you’re not likely to get a complete picture of changes that can make a big difference. 
  2. Focus your efforts in a way that will yield responses you can a) actually act upon and b) are prepared and willing to adapt or respond to when they come in. This doesn’t mean you have to do everything that is suggested, but you’ll want to celebrate or announce the changes you made as a result of the research. This way, your customers and prospects will feel validated for the time they took to provide the feedback – even if you only do one thing, it will buy you time to execute others when you talk through the first change.

Another solution to consider if you don’t feel ready to tackle a customer research initiative:

Rally your key leaders and unpack each step of your customer experience. 

This is especially important if you’re in a situation where you learned how to run your business by watching how things were run while you worked for someone else. 

For example, I can’t tell you how many contractors I’ve worked with over the years who started their own business after spending years working for someone else before deciding they wanted a bigger piece of the pie or were convinced they could do more on their own. This, or just as a function of time, can cause anyone to fall into “the way it’s always been done”. Here are a few questions to work through with your team:

  1. How do we answer the phone when it rings?
  2. What is our quote/estimate process and how can we make it better for our customers?
  3. Is our website clear and easy for someone who has never seen it before or for someone who knows nothing about us or what we do?
  4. After we finish a job, provide a service, deliver a product, how do we ensure our new customer feels valued and appreciated?

The list could go on, but I hope this gets you started.

I’d LOVE to hear what you found was most helpful, and more importantly, what you’re going to do as you prepare for 2022 to improve your customer and prospect experience. I promise you’ll see improvements in your revenue, customer loyalty, and conversion rates. 

Need help? Get stuck?

Shoot me an email with “research” as the subject line and we’ll get you further down the path.

Oh no! Facebook is down… now what do I do?

Maybe you noticed, maybe you didn’t. Chances are, at some point you’ll have either been directly affected by today’s Facebook outage – or at least heard about it.

As I’m writing this, it has been down for at least an hour and is still down for who knows how much longer.

Never fear. I’ve got you.

This is a bit long, but stick with me for ONE key solution that can’t be overstated when stuff hits the fan…

While Zuck’s platform isn’t my favorite thing on the planet, I do value it for a variety of reasons (both personally and professionally).

On a business level, I know I had several things lined up to execute today. Maybe that’s the case for you – or someone on your team.

What if…

  • You had a huge Instagram campaign lined up for today
  • You planned a Facebook Live event during the outage
  • Your new product or special announcement just dropped and now your audience can’t find it

Hopefully, we’ve learned something from the past year and a half or so…

Things happen that prevent us from doing “business as usual” or at least how we planned.

There was a time when we suddenly:

  • Couldn’t depend on walk-in traffic to our stores for sales
  • Had to figure out what to do when that tradeshow or special event got cancelled
  • Lost out on in-person interactions to drive leads, sales, etc.

What did we learn then – if we didn’t already know it – about the value of having control of when and how we communicate with those we aim to serve?

Owning your own list of email addresses, phone numbers, mailing addresses, etc. for your customers and prospects is VITAL.

Think about those restaurants who were suddenly forced to shut their doors. 

The ones who had an email and/or mailing list so that they at least COULD notify their customers about a new curbside or delivery service were MUCH better positioned for success than those who did not.

Same thing is true when social media platforms go down. Remember when Twitter blipped for a bit? Yeah, it’s happened. 

Don’t get me wrong, it is important to understand if or how social media can or should fit into your business strategy, but…

It can’t be the be all and end all for your success. Just like any other digital or in-person tactic or strategy that might suddenly be taken away or go on pause.

What can prevail is your own list of customers and prospects.


Glad you asked 🙂

Start with these three things:

1. Review your lead capture and lead management systems.

How well are you capturing data that will enable you to have what you need to communicate and drive sales when other methods or channels shut down?

2. Examine your communication strategy to your list.

If the first time they hear from you is when something happens, that’s better than nothing. 

How much more effective will that outreach be if your list is used to hearing from you and getting value from what you send?

3. Have a backup plan for ways to get your message out if your primary plan takes a left turn.

Even better…have an “integrated and cross-channel” plan that will hedge against any issues that might arise.

This way, if one piece (like FB shutting down) gets sidetracked or shelved, you’ve got other pieces in motion to keep things rocking and rolling.

I’m here to serve.

Even when, and especially if, businesses get hit with curveballs.

Want to talk more about anything from today’s message?

Grab a spot on my calendar here

If you haven’t already…

Check out my quick video on the 6 fundamentals that will keep you from lighting your marketing or advertising money on fire.

Or… comment with a question or the 1 thing you’re going to do to improve your readiness for the next thing that could throw a wrench in your success.

I’d love to hear from you.