I love a good sale as much as the next person. In fact, I usually wait until the end of the season to buy my favorite designers. And now, with the economy being what it is, I’m seeing more and more businesses in the wedding and event industry also offering steep discounts. But are discounts really good for our businesses? Let’s break it down:
PROS
1. You keep working!
2. As long as you’re working, you’re learning.
3. You meet new clients and vendors, and your network of contacts grows.
CONS
1. If you’re offering a drastic discount, you’re most likely not making a large enough profit.
2. You’re getting work, but you’re making everyone else in the business look like they’re overcharging. In reality, they’re charging what they should be charging; you’re the one who is undercharging. But clients don’t know that.
3. You run the risk of being associated exclusively with bargains. That’s a hard reputation to distance yourself from. It may follow you for decades.
I’ve been accused of being too expensive. But I have never overcharged clients. My prices are based on a very specific set of criteria:
1. The time that I invest in the project, which is my hourly rate.
2. The cost of the materials, such as flowers, lighting, food, etc.
3. My overhead, including rent and bills like electricity and insurance.
4. My designs, and yes, folks, these aren’t free.
5. Travel time and transportation.
6. The breakdown and the length of time the breakdown takes.
7. And last, but certainly not least, TAXES.
If you can offer a discount and still manage to take care of all of these things AND make a 50% profit then that’s great. However, it has been my experience that any time I give someone a discount, I lose money. If you want your business to be a long career, be very careful about developing any sort of discount policy. In the short term, it might get you a few more jobs, but at what cost in the long term?
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George Bernard Shaw once said: “You see things and say, ‘Why?’ But I dream things that never were and say, ‘Why not?’” That quote embodies how Preston Bailey approaches every event.
Trudy-Ann Armand
June 2, 2011
I am new to the business and it is very tempting to offer discounts to attract business, however it seems like as you said, that reputation could be very difficult to recover from. I keep hearing and reading that if you don’t put a true value on your time and talents why should a client. Thank you for sharing your experiences and wisdom.
JACLYN
June 2, 2011
I am a floral designer and think of my time as a precious gift. Time, the labor put into each event, and evrything you’ve mentioned above. It is what it is … there are no short cuts about it. those who want to pay will and those who don’t, well they will find another designer. I am able to accomodate any customer or client but there is a difference when one is going to the high end of the spectrum and those who don’t want to cough up their money.
Jacqueline @ The Pink Chandelier
June 2, 2011
You are so right about your “Designs are not free”. It’s not just about your time, it’s about your creativity and talent. Bravo – great article!
afcpam
June 2, 2011
Amen and amen!! Great advice. “Charge what you are worth or you will be worth what you charge.”
minnie mina
June 2, 2011
wow! i’m kind of new to this industry. just completed my intership and training, and i was given the imperssion that discounts are “the best”. i had questions pertaining all to what you’ve just explained. and i couldnt agree more. thanks.
Michael S. Wade
June 2, 2011
I’m a wedding photographer and have been for 25 years. I got this bright idea a couple of years ago to offer 10 percent off if the client paid in full upfront. My problem was that I had calculated my pricing wrong and didn’t realize how much the discount would bite me. I lost about $12,000 before I fixed this. Discounts don’t work unless you want budget clients. You can’t live on those.
A Day To Remember
June 2, 2011
Thank you for always being an inspiration!
flowerlover
June 2, 2011
I am a floral designer and couldn’t agree more.
Asian Fusion Weddings by Wedding by Wendy
June 3, 2011
It’s funny how the wedding industry gets roped into discount. Perhaps we just don’t have the will power to collectively say NO.
Melina
June 3, 2011
It also devalues the work you give to your client. If you take on more work because you have an awesome discount, then you must take on more work than usual to make up for the loss of money from the discount. Thus you don’t give your all and best to the client. Then it becomes a downward spiral, you are crazy busy and hectic, the client gets mad and you get the reputation of being cheap in price and quality. Maybe discounts on products can be good but not on service provided.
OFD Consulting
June 3, 2011
I love it- especially the bit about taxes.
I’ve seen far too many wedding pros discount during tough times and are finding themselves having a very difficult time bouncing back. After all, not enough time in the day. Thanks for sharing!
Reese
October 4, 2011
I own a linen rental business and in my area many of may competitors are give 10%-15% discounts to basically anyone who asks for it. I’m still in the early stages of my business and sometimes when orders are placed I still have to order the product. I can’t take a hit by having to throw in an additional discount plus have the cost of purchasing the linens. How do I compete with that.