Why Discounting is NOT the Answer

Here at Whitewed, I work with engaged couples, wedding venues and suppliers alike, and 13 years in the industry and many thousands of contacts means I have a true and realistic view into how both sides of the industry are performing, coping, and what their challenges and wins are.

As a wedding venue or supplier, now, more than ever, you'll be worrying about your immediate income. Whilst next year will be busier than ever, it feels like that time is far away and out of reach, and you'll be questioning how you will survive financially in the meantime.

Let's face it, our businesses are our babies and we will do absolutely everything in our power to open our doors on the other side of the Coronavirus lockdown and continue trading with success - as a result, many of you will be considering temporary employment elsewhere to see you through this period. Many of you will be developing new services that are immediately attractive to the new market that you can launch as soon as you're able to...many of you will be looking at your costs and considering how much to DISCOUNT them to gain new clients.

But discounting is NOT the answer, and here's why...

Firstly, your pricing is part of your brand identity and you should never underestimate the impression it gives.

Brand identity is everything – it’s not just your logo - it’s you, it’s your team, it’s what you offer, it’s how you work, it's your 'why', it’s what you love...it’s what attracts your clients to your business.

Your brand identity is what sells your service. If you are more expensive than your competitor but your potential client buys into you and is attracted to your brand, they are more likely to book you over your competition.

It is your biggest business asset, and all discounting does is undervalues it - you will be throwing away something that you've worked tirelessly for since you launched.

When businesses are able to open and return to the 'new' normal, everybody will be desperate to come back with a bang, and they will be hungry for every new client opportunity - and many will wrongly think their only option is to announce unsustainable discounts in order to net a series of new clients.

BUT, this is NO way to run a business as you are in business to make a PROFIT, not a LOSS!

Secondly, discounting only means that you reduce your capacity AND erode your bottom-line – so you’ll be running around like a headless chicken for no return - and if you think you're fed up now, you'll be seriously fed up after a year of running discounted weddings.  

And that's not all, once you become known for discounting, it's hard to revert back to your ‘normal’ pricing, as people are waiting for a discount to be announced before booking. Think of Laura Ashley…all your hard work to build your brand comes to nothing.

So what can you do?

You need to know your worth – and charge accordingly.

Firstly, do you know how much your products / services actually cost YOU (not the client), you?

Use this downtime to calculate how long on average it takes you to complete each task for a client – build in some time for managing enquiries too. 

Add in your hourly rate and calculate how much it actually costs you in time to provide each of your products / services to your client.

Then build in your product cost (averages are fine as a starting point) if applicable, AND build in a portion of how much it actually costs to run your business – so all of your overheads – accountancy / equipment etc.

Next, compare your calculations to your current client rates.

If you haven’t done this already, you’ll probably be in for a shock when you see the figures.  Many businesses are running at less than minimum wage, and many will find that the reality of their costings means they need to increase their client rates immediately, not reduce them!

Why a discounted client isn't worth it

You've undermined your brand, you don't make the profit you need, AND most clients who want to knock down your pricing are those that cost you the most time, as they tend to be needy and don’t value your service! …and you’ll find that you resent them (even if you don’t mean to) as they are not paying you your worth and you end up delivering less than perfect service AND that’s where you run the risk of ruining your brand further with a bad review.

In my opinion, no point having the client!

What can you do instead?

You may consider running a special offer, but my advice is that this is only across one product / service which will enable you to up-sell to another product / service easily. Make sure that it’s no more than 20% AND make sure that you’ve covered your costs and still make a profit on the special offer BEFORE putting it out there. ...AND that it’s for a limited time only, and not a common thing.

If you believe that your higher priced products and services will be out of reach for many just now, introduce some cheaper options to your range instead – this will enable you to promote on quality, not on discounting. It’s been proven that consumers buy cheaper luxury goods during times of economic uncertainty – referred to as the ‘lipstick effect’, and this can apply to all that you offer too.

Whatever you do, DO NOT discount your prices. We need to stand together as an industry and a community, and challenge and educate those that are tempted to discount. If businesses start to discount on mass, they will undermine this wonderful industry and cost us our livelihoods - ultimately, you are in business to make a profit and earn a living - sadly, passion alone doesn't pay your bills.  

Be proud of your pricing, and let's re-open our doors with confidence in our brand's worth!


Stay safe,

Natalie Lovett, Director of The Whitewed Directory