You guys know I am big on taking cues form big brands and learning from their years of experience and research. It’s a great idea to be observant of big businesses if you run a small business and you can learn a ton by doing so. There are some things big businesses do though that do not suit small business at all.
The one I want to discuss today is discounting first orders. This is a tactic we see big businesses doing all the time but it is not sustainable for small handmade businesses.
shop owners are underpricing
First, most handmade shop owners are already under pricing, so to discount on top of that results in even fewer dollars earned per hour. I see a lot of handmade shop owners offering discounts on first order as an opt in incentive or worse, in association with a paid feature (on a blog or Instagram account).
Why?!!!! Whyyyyy would you do this? It doesn’t make sense to me…. you’re making moves to introduce your brand to a new audience that (hopefully) is engaged and aligned with the blogger or IG account you are collaborating with, and you’re leading by devaluing your brand! It’s bad. Don’t do it.
From then on, those people will associate the price they paid (discounted) with your work, and will always see the full price of the item as, well, too much. Now, that’s not to say this tactic can’t work at all. I’m sure some people will buy at a discount then return at full price as well, but why would you give a discount on the very FIRST order a person places with you? I don’t like percentage off coupons as an opt-in either really, but at least then you’ve got their email.
Alternatives to discounting
Rather than discounting, you should add value, and enhance the experience customers have with you so that they will be inclined to pay full price the first time and over and over again.
Another reason I don’t like discounting first orders is because you’ll probably run a discount at another time as well… why not offer that discount to your loyal followers and customers instead? You want to reserve those discounts. You don’t want people just waiting for your next sale to purchase, which is what will happen if you train them to expect discounts from you. Surprise discounts are great and strategic… expected discounts are not.
Your work is worth it. Price it fairly + improve the experience for your customers, and they will buy it at full price over and over!
Need help with pricing? Click here to watch the FREE Pricing Workshop that Janet from Paper and Spark and I collaborated on to help you!