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AKA Why deep discounts are a terrible way to get new clients
Over the last decade, the hunger for deals and offers has become insatiable. I am currently working with an owner of a small, boutique, niche laser clinic in London. It’s a stunning clinic and the therapists have been trained within an inch of their lives and boy, oh boy is the owner doing a great job to motivate them. So why did I get invited in to help?
The clinic owner has been running some deep discounts (70% off LHR) on a daily deal site and wanted my help to look at ways of retaining these clients. I turned the task down because I’m not a fan of impossible missions!
I wanted to share my reasoning with you too as too many people are seeing their business and reputation being eroded by an expectation of huge discounts:
These sites have created a new breed of consumer and they are deal hungry, I can guarantee that if they’ve bought something at 70%, it’s going to be close to impossible to get them to pay full price down the line – they will jump around from clinic to clinic, deal to deal.
However, they still have the same high expectations of service – they certainly don’t expect a 70% reduction in quality! I’ve seen clinics use trainee therapists to use these clients as practise, it rarely works, unless they get a superlative service they will complain, leave reviews on platforms and social media – which does rankle a bit when they are getting such a big discount.
They want all your popular slots – these deep discounts rarely come with the terms and conditions that mean discount clients can only come in on your quiet times, meaning you know have discount clients fighting with full paying clients for your top / most lucrative diary slots – having a negative effect on your profitability
You rarely cover your costs, meaning each client is costing you money to service. In more detail, most of these sites take up to 50% (plus the VAT) of the purchase price. Out of the remainder you must cover base cost of the treatment, any consumables, supplies before we even think about salaries, utilities, contribution to rent etc
It shows people what you value your services at – this is the critical point for me, Running deep discounts as a way to get new clients creates a story for your audience and that story is about how much your services are worth – you are telling all your customers that your services are overpriced – they must be right? If you can afford to reduce the price by that much, what you’re saying is the original price is too much – a double whammy of brand damage right there!
So how should you manage discounting? Can it be useful?
Offer incentives (not deep ones) to you regular clients – reward the loyalty of your existing clients rather than underselling yourself to get new ones
Think about adding value rather than simple discounting. You could add free products to course purchases, gift bags, seasonal treats. You could tack on some extras to encourage a bigger purchase – eg a free LED treatment with a course of facials – what this does is encouraging a course purchase by incentivising the bigger outlay, keeping the client in clinic for longer – what a winner! All those extra opportunities to build relationships, to cross sell, to manage results and expectations.