drop the discount?

I recently read it's a sales sin to discount. I had been intending to offer big discounts on most of my pricing . The point being my service cost is pittance - does that make a difference to how you view discounting? I presume the serious sin is discounting and then cutting one's own margins?
Essentially the service cost is maybe up to 30-45mins of my time, but the service itself actually helps build my business (website), so dare I admit I'm fairly happy to cut prices down (better a discount than no sale).

sorry to repost, isn't there a way to edit?

This no discounting is very significant for me. I'm not clear on what my pricing should be (as mentioned in priceless pricing post) as there's nothing comparable. I was going to set some pricing soon and figured I'd just plonk some prices in as a line in the sand, with a view to just discounting later as necessary.

The point is I can set the prices today but as the site is growing ie. my ROI for advertisers using my service increases, and will probably continue to do so for the indefinite future.

If sales wisdom says I should not discount, how I should set my pricing? (I would prefer not to do a pay per performance model)

Cutting margins and diminishing perceived value through discounting does not appeal to me but I know others do it.

Are you sure there is nothing comparable?

In my industry discounts are very important as customers are always shopping around for the best deal. It is important to know your profit margin on each product and to play around with the margins with difficult customers.

I think dropping discount is not good if you are ine highly competetive market , most people tend to go to those who always give them little extra for there money

Looking at the progressive needs of a prospect, if enough desire is obtained the benefits should unarguably justify the price. Cost is relative to the product/service.

Originally Posted by jimberan In my industry discounts are very important as customers are always shopping around for the best deal. It is important to know your profit margin on each product and to play around with the margins with difficult customers.

When a customer believes your price is too high (as opposed to just trying to get a few buck off) it means that he does not see the value in your product. Your job is to show them why, if it is really the case, your product is worth the extra money over discount product "B."

Wear the Right Hat!
Bill

I dont believe in discounting as a sales methodology as you describe.

Basically it is about percieved value. For example: most software on the market today costs just pennies to distribute (particularly if it is downloaded over the internet) but still companies like MicroSoft charge hundreds of dollars for it.

It is because if the price is lower than the customer percieves is the right price point then they start to think either that your product or service is defective in some way or that it is not as good as your competitors.

Be bold and confident about your pricing. We just recently advised a client of ours to put their prices UP! They did, and the sales went up as well!