This article was written by WeddingWire Education Guru Alan Berg, CSP. Alan has over 20 years experience in wedding related sales and marketing, and is an author, business consultant, a member of the National Speakers Association, and the wedding & event industry’s only Certified Speaking Professional®. Learn more at alanberg.com.
A very contentious topic among wedding pros is discounting. Both sides of the debate dig in, deeply, when this question is posed on social media or in forums. To completely understand this subject, the discussion needs to first start with defining discounting versus negotiating. I’ve discussed this at-length in my webinar on pricing so if you haven’t seen that one, you may want to watch that as well.
Discounting versus negotiating
For me, discounting is fine when it has a structure and rules. Everyone who buys the same products or services for equivalent dates will pay the same price; the rules are applied equally to everyone. For instance, if you have three packages and your higher packages, which contain more services, also have the highest discounts, that’s great. If everyone who buys that packages pays the same price, then the rules are being applied equally.
On the other hand, negotiating means that two couples who buy the same products or services may pay different prices. Each customer’s ability to negotiate or not will determine their final price. The challenge with negotiating in today’s digitally connected world is that people can, and will, talk about their discount. If you can’t easily explain to one customer why they paid more than another customer for the same products and services – for instance, an in-season date versus an off-season date – then you’re negotiating, not discounting.
Discounting can be part of a pricing strategy. Negotiating can also be part of a pricing strategy, it’s just less structured. There are times when I’ll negotiate to get the sale, but it’s the exception, not the rule. I recommend to my consulting clients to offer added value over a discount in price, as it helps to keep integrity in their basic pricing structure. If you’re ever thrown in an extra product or service to get the sale, you’ve negotiated. Some companies do it on every sale. If you give the same or similar added value services every time, you’re really discounting, not negotiating. If the proportionate value of the added products or services changes with every customer, you’re negotiating.
Which is right for you?
There’s no one answer that’s right for every business. Personally, I prefer discounting over negotiating, as it’s easier to explain to your employees and your customers. I understand that it may not work for all businesses. In my business, as a speaker, sales trainer and consultant, there is no standard price list. Each event and client involves a different set of circumstances (travel, preparation, residual business, etc.). However, when it comes to my physical products (books, CDs, etc.), discounts make sense. For example, when I have a booth at a trade show or event, I’ll have my books and CDs, and usually offer an event discount. Many times I’ll be asked for an even lower price, and I’ll thank them and say that the listed prices are already discounted. Then I’ll ask if they want to pay with cash or credit. Asking for a discount is a buying signal, so always ask them for the sale when they you ask for a discount.
Don’t fight the power
One of the keys to having pricing power is when the customer wants you, specifically you, to do their wedding or event. You’re not available anywhere else, at any price. If they don’t perceive any difference between you and another company with a lower price, the lower price will win. If they can tell the difference and want you to be their planner, or caterer, or officiant, they have to pay your price.
Get something of value in return
If you’re going to discount or negotiate, try to get something of value in return. If you only lower your price, you’re giving away profit. The products and services will cost you the same, but you’re getting paid less for them. Whether it’s getting a bigger deposit, being paid in full now, taking away services, or a higher guaranteed minimum guest count, make them a partner. If you’re the only one giving, they’ll keep taking. When they want to stop giving, they’ll stop asking.
They’ll be back
Many customers will shop around and find a lower price, which isn’t hard to do these days. If they do find a lower price and they still come back to you, they’re signaling that they can tell a difference, whether in your products or services or in the way you’ve provided a better customer experience – or both. That’s an indication that you have pricing power.
They may ask you to match the lower price, but you shouldn’t have to in order to get the sale. If they felt the other company would provide just as good products or services and customer experience, they wouldn’t have come back to you. The fact that they’re coming back shows that they like you better. Always thank them for coming back. After all, if price was the most important factor, you’d be out of the running.
Price doesn’t determine outcome
Sure, sometimes the lower price will win. A line I often use is “If price is the most important factor when choosing your (photographer, band, dress, speaker, etc.) then I’m probably not the best choice for your event.” Change the discussion from pricing to outcomes. There are many wedding and event pros who don’t charge enough, whether by choice or out of fear.
Do I have to offer a discount to get the sale?
Whether you decide to offer a discount or not is a personal decision and part of your personal brand. There are many very successful businesses that offer discounts. Sometimes it’s due to competitive pressures, and sometimes it’s to encourage a higher sale. WedInsights Volume 6 discusses packages versus selling a-la-carte. Packages are a way of using discounts to encourage a higher average sale.
What’s the right answer for your business?
I’d have to know a lot more details to answer that. But when discounting becomes the reason that couples book you instead of them wanting only you to do their wedding or event, you risk diluting your brand. When they’re choosing you mostly on price, it’s easy for someone else to come along and undercut your price. So, discount or negotiate, it’s up to you – but be careful not to get caught up selling the discount, instead of selling your brand.