Top 7 Reasons Why “Poor” Discounting is Killing Golf Businesses & The Secret To Discounting “Properly”

Observing the madness of the recent Black Friday and its digital sister, Cyber Monday,  I was reminded how tempting it is to follow the pack and fall into the vicious circle that is “discounting”.

Discounting is absolutely my pet hate about golf...

The impact on the industry globally is, quite simply, unquantifiable. If only this clever technique for pricing was better understood.

Few businesses truly understand how to avoid falling into the trap that is “discounting”.

Here are my 7 reasons why POOR discounting is killing golf businesses:

1 - It makes you look desperate for sales 
Our primitive brains are attracted to what is in short supply and we mistrust something that “looks too good to be true”.

2 - It pegs your prices to your competitor's 
Responding to competitor discounts creates a price relationship between you and your competition which is really difficult to break free from. Their prices are not in your control.

3 - It implies low value 
Price is contextual and consumers are poor at determining ‘value’ from price. You’ll almost certainly be doing yourself a disservice in your customers’ eyes.

4 - You’ll resent your customers who pay less
You're not a charity after all, people should pay a fair price for what you're offering.

5 - There’s nothing worse for your profitability 
100% of the price drop falls to your bottom line and that threatens your very business

6 - You condition your customer to expect and wait for discounts
This is so true. When you know a company always discounts, you’ll wait to buy ONLY when they discount. Which means…

7 - You’ll attract the wrong type of customer 
Your ideal, target customer doesn’t buy on price, they buy on value. Only 10% of consumers buy on price alone...and by discounting, that’s exactly who you’ll be most attracting.

There is only ONE situation in which you should regularly discount...

It’s when you are the lowest COST facility out there!

And, in fact, you’re not discounting so much as offering permanently low prices. And if you are a low cost, low margin, HIGH volume business...that model can work.

Walmart’s “pile it high, sell it cheap” philosophy has turned them into one of the biggest corporations in the world.

But, as they say in Highlander, “there can be only one”. And if you’re not that one, you need to try a different tactic.

Now with all of that said, if you  use “discounting” carefully and correctly, it can be very effective. But only if you stick rigidly to the following 3 rules:

1. Discount small
You don’t want to send the wrong message or attract the wrong type of customer BUT you do want to give some reward or incentive to…

2. Encourage behaviour that suits you
For example early booking is great for you, it fills the books up and helps you forecast. Incentivise your customers to book early with a discount.

Online booking is also good for you, it means you need to spend less time on the phone. So, make it beneficial for your customers to book online. Payment in full or ‘prepayment’ swells the bank balance and that too is worth a small discount.

Or how about ‘no cancellation’ i.e. loss of flexibility for your customer. Guaranteed revenue for you, cheaper price for your customer. To see this done brilliantly, check out the hotel industry, look to them for inspiration

3. Remove discounts once you’ve removed the compromise
In other words if you offer an early booking discount, remove it once the deadline has passed. If you give a discount for booking online, make sure you offer the normal price when your customer calls to book over the phone.

Well that’s it on Discounting for now! If you're going to go down that route...please, please, please do it thoughtfully, deliberately, not desperately.

Do it wrong and the consequences are always bad. You’re better off not doing it at all.

But stick to the few rules above and you can still get all the benefits without falling into one or more of the 7 evils!

Good luck 🙂

If you enjoyed this post and would like to learn more about Pricing your products and services or Marketing in general, click below for a sneak peak from your choice of 2 Free Video Lessons from The Golf Marketing Masterclass, including:
 Understanding Your Customer's Behaviour
 Social Media, What to Post?