Sales & Discounts: A Service or Disservice?

Ever since Black Friday, I’ve been thinking about this question. Is it a service or a disservice to offer deep discounts to customers? As a customer, I love being able to take advantage of a good discount and save money. Who doesn’t?

On the other hand, seeing such crazy price cuts and knowing that even with the markdowns, stores are not selling at a loss, makes me think these retailers must have pricing really jacked up in the first place. And that makes me mad – for a couple of reasons.

As a consumer, if I pay full price and in a next week it’s on sale for 50%, I feel like I paid too much. Even if I go back and the store gives me the price difference, how much time and effort will that take? Time is valuable too, so probably not worth it.

As a business owner, I can see how these practices condition customers to expect and wait for sales. Sometimes, seeing all the 20%, 45% and 70% off promotions around me encourages me to think about putting my products on sale too. But unless there’s a very good reason, such as it’s at the end of its shelf life or you need to clear out a particular package, discounting cheapens the value of what you’re offering.

Have you noticed that Louis Vuitton, Rolex, MAC and Under Armour never go on sale? Sure you can argue that LV and Rolex are luxury items and their target market can afford them regardless. The other two brands are not considered luxury though, so that logic doesn’t work too well. Furthermore, I saw an article earlier this month in which Louis Vuitton Chief Executive Philip Corne was quoted as saying, “If we never go on sale, then we never undervalue the product. This consistency is well-recognised by the consumer.”

Right on; there’s the key. It’s not about the cost – it’s about the VALUE (which gets into a whole other blog post, to be written soon. In the meantime, watch this Bob Burg video clip).

If what you’re providing is of real value, then offering it at a discount seems to be more of a disservice to your clients. Your thoughts?