Black Friday death spiral: Why Cutting Prices Can Cut Your Value

Meet our unsuspecting Black Friday purveyors: Del's Discount Consultancy and High Value Val's Specialist Consultants. Both are in the same industry, selling similar services, but their approaches to pricing couldn't be more different. Del believes in slashing prices to attract clients, while Val focuses on delivering high-value services with minimal compromise on pricing.

Guess which business thrives in the long run?

In The Assisted Purchase, I stress the importance of focusing on your highest-value deliverables—those services that bring the most profitability, sustainability, and, yes, fun. Discounts can be a slippery slope that undermines this focus, devaluing your business and diluting your brand. Let's dig into why discounts can be dangerous and when, if ever, they might make sense.

Del’s Discount Consultancy: The Perils of Price Cutting

Del is a classic example of what happens when businesses lean too heavily on discounts to drive sales. He assumes that if he lowers his prices, clients will flock to him, and he’ll make up the difference in volume. What he doesn’t account for is the toll it takes:

1. Perceived Value Drops: Clients start to view Del’s services as low-quality because they equate price with value. If Del charges less, surely his work is worth less, right?
2. Profitability Plummets: Del is working harder, serving more clients, but his margins are razor-thin. The result? More stress, less profit, and a never-ending hustle.
3. Attracting the Wrong Clients: Discount-hunters tend to be less loyal, less engaged, and more likely to haggle every time. They’re not here for your expertise—they’re here for the bargain.

Del’s business feels like running on a treadmill: lots of effort, little progress.

High Value Val’s Specialist Consultants: The Power of Value-Based Pricing

Val, on the other hand, takes a different approach. She knows her worth and aligns her pricing with the value she delivers. She only discounts under one condition: when there’s an assured client lifetime value (CLV). If Val offers a discount on her services, it’s not for her core offerings—it’s for add-ons or lower-value services that act as a gateway to her premium work.

For example:

• Core Offerings: Val never discounts her flagship consulting packages. These are her bread and butter, the services that generate the most revenue and build her reputation.
• Non-Core Services: Val might offer a small discount on an introductory workshop or a diagnostic session, knowing it will lead to long-term, high-value engagements.

This strategy allows Val to maintain her brand’s premium positioning while using discounts strategically. Her clients respect her expertise and see her as an investment, not a commodity.

The Assisted Purchase Framework: Focusing on Value

In The Assisted Purchase, I highlight the importance of steering clients toward the services that align with your expertise and their needs. When you focus on your highest-value deliverables, you attract better clients, maintain stronger margins, and create a more sustainable business.

Here’s how this philosophy applies to discounts:

1. Know Your Core Value: Focus on your most profitable services. These are non-negotiable—no discounts, no exceptions.
2. Strategic Discounts Only: If you must discount, do it on services that aren’t your primary revenue drivers. These should act as stepping stones to your core offerings.
3. Assured CLV Is Key: Don’t discount unless you’re certain it will lead to a long-term, profitable relationship.

The Cost of Fun and Freedom

Let’s not forget the fun part. Both Del and Val started their businesses to create freedom—financial, time, and creative. But while Del’s discounting strategy traps him in a cycle of overwork and underpayment, Val’s value-based pricing gives her the freedom to focus on the work she enjoys with clients she loves.

Are you stuck in the discounting trap, or are you ready to reclaim your value? Listen to my Grow Sell and Retire Podcast episode with John Mullins on the Grow Sell and Retire Podcast , where we dive into customer-funded business strategies. And if you want to get serious about maximizing your profitability and sustainability, grab a copy of The Assisted Purchase https://rockfine.co.uk/the-assisted-purchase/. It’s packed with actionable insights to help you build a business that’s not only successful but truly fulfilling.

Because at the end of the day, you’re worth your full price. Don’t let discounts tell you otherwise.

Want to know how Leverage: Profitablility Accelerator can Rev up your enterprise value? [email protected] and we will tell you how.