Dropping your price to make a sale is
almost never the right way to go.
By Scott Oser
If you are in sales of any kind, you
know you have thought about—or actually offered—discounted rates to prospects,
current clients, or both to get them to commit to purchasing whatever you are
selling. In certain situations, reducing your association’s ad prices
(discounting) is a smart strategy, but in general, dropping the price to save a
sale is not the way to go.
Here are a number of reasons why:
perceived value. If you are continually reducing your pricing and offering
special discounts, advertisers—and potential advertisers—will not perceive the
value of the advertising as highly as they would at full price.
not a commodity. You want to form relationships with your association’s advertisers
and sponsors. You want them to understand the value of advertising with you and
therefore the value of reaching your unique audience. By selling primarily on
price and wheeling and dealing every chance you get, you are not forming
relationships—rather, you are turning your ads into a commodity. When
purchasing a commodity, the buyer focuses only on price and not on value. Fighting
with your competitors on price alone is not something you want to do.
Once you go down
it is very, very difficult to go back up. Any time you reduce your price,
you are putting a price stamp in that advertiser’s mind that is very hard to
erase. In fact, once you drop the price, advertisers may even expect you to go
Advertisers are often exhibitors and sponsors at industry events, and they do
get to talking. Although it may seem strange, at some point those conversations
could lead to how much they are paying for your advertising. If one company
finds out that another is paying significantly less for the same space, you stir
up trust and value issues.
simply equals less revenue. Advertising revenue is typically required for
your magazine and your organization to thrive. If you are doing a significant
amount of discounting, you may impact your publication or your company.
As mentioned earlier, discounting
is not always a bad thing to do, but if you are going to discount, you need to
do it strategically. Some examples of strategic ways to use a discount include:
Offering a one-time discount to first time
Offering a discount to category leaders who will
hopefully bring in other companies in their category.
Offering a discount to companies that have
already purchased other things from your association (exhibit space,
Remember to make sure that discount availability has a start-
and an end-date so people respond quickly.
During your association career, there are going to be many,
many times when you are seriously tempted to discount. As you can see from just
some of the potential impacts listed here, the large majority of the time it is
something you should avoid unless it is part of your overall sales strategy.
Scott D. Oser
is president of Scott Oser Associates.