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Sf Tip of the Day - Discounting

In summary, the coffee shop owner is in a difficult situation because of the practice of discounting for favorite customers.
Kathytnt
2,629
Thought this one was really good!!!

Today's Tip


Subject: Discounting…yes or no?

Tonight's dinner table discussion was an interesting one. Two of my children work at the same neighborhood coffee shop. The coffee shop had a recent change of owners at the beginning of the year. The new and current owner - we'll call him Sam - is in a bit of a dilemma. After owning the shop for nearly eight months now - he is hard pressed to realize a profit. Of course there is the normal three to five year `curve' that applies to any new business, except, that this business has been open - with a very established customer base - for over six years.

So…what's the problem, you may ask.

As in most businesses, there are a variety of contributing factors - including too many Starbuck's within close proximity. However, a HUGE issue is the practice of discounting for `favorite' customers, established by the previous owner. Sam is now trying to do damage control in order to begin to realize some profit without offending the regular customers. It is a tricky situation to be sure.

I share this story today as food for thought for you and your business. Certainly there may be times when you run special sales for your customers. I would caution the practice of discounting too regularly.

Getting into the habit of discounting does several things:

Your customers will begin to balk when you charge full price and only want to buy when they receive a discount.

It devalues your product line.

As in the case of Sam - it is difficult to reverse once started.

MOST IMPORTANTLY - your business is far less profitable when you discount.

As women, sometimes we have difficulty being paid what we are worth. Some of us feel guilty for taking money and therefore “giving a deal” seems like the right thing to do. Men don't do this. Somehow, they are wired differently - I'm convinced of this. Men don't apologize for things they didn't do (ever notice how often women say I'm sorry for something that they had no part in?). Men don't feel bad about or make excuses for money they are paid for a job done; whether in the form of commissions for sales or fees charged if they are a doctor, lawyer, accountant, etc;. The `why's' behind this phenomenon is the stuff self-help books are written about and not the subject of today's tip.

Just remember - you are in business to make money. If you are not in business to make money - then you probably will find yourself with an expensive hobby. Hobbies cost money - businesses make money…period.
 
That is really good advice! It is easy to get caught up in "needing" the sale and so offering discounts. For most of us that commission check IS important too!

Thanks for sharing.
 
I totally agree! I very rarely give incentives. I will be doing one for bookings at my fall preview show, but it is only the sprinkles if they book by the end of December.

I have a casual friend who does sales just about every month for her biz & I have to admit that I usually only buy something if it is on special. Since I know she does it all the time, I just wait to see what the special is. Great for me--not so great for her!
 
Thanks for that advice. I love to give stuff away but you're right, you get to a point when they EXPECT to have it everytime. Even PC created a monster with the buy XX get XX free. Now since they've stopped doing that, my PC customers who are "regulars" are all huffy because they aren't getting something free. I guess I just need to find a balance. I do like to reward people who spend a large amount with a free gift. I've actually run into the problem when someone at my show say's "so & so consultant gives this or that away for doing this." It's harder to compete.
 
I saw that on another thread, but it is something to think about.
 

What is the "Sf Tip of the Day - Discounting"?

The "Sf Tip of the Day - Discounting" is a promotional offer from Pampered Chef that provides customers with discounted prices on select products for a limited time.

How often does the "Sf Tip of the Day - Discounting" change?

The "Sf Tip of the Day - Discounting" changes daily, providing customers with a new discounted product every day.

How can I access the "Sf Tip of the Day - Discounting"?

The "Sf Tip of the Day - Discounting" can be accessed through the Pampered Chef website or by signing up for our email newsletter.

Are all products eligible for the "Sf Tip of the Day - Discounting"?

No, only select products are eligible for the "Sf Tip of the Day - Discounting". These products will be indicated on the website and in our email newsletter.

Is there a limit to how many discounted products I can purchase?

Yes, there is a limit of one discounted product per customer per day for the "Sf Tip of the Day - Discounting". This allows more customers to take advantage of the daily discount.

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