[00:00:00] Mia Fileman
Are you tired of empty promises and stolen ideas? Me too. Got. Marketing is a podcast for marketers and small brands who want real talk and clever strategies. Without the bs. Running an online business is hard. But everything gets easier when your marketing starts performing. I am Mia FileMan, your straight shooting campaign loving friend here to talk marketing, running a business, pop culture, and everything in between.
Let's dive in
[00:00:40]
Many small business owners, especially service providers, fall into the trap of discounting because they don't have strong marketing. But discounting should be a deliberate strategy, not a crutch. In this episode, we break down why new business owners feel compelled to discount, why that strategy is fundamentally flawed, and how pricing can be used as a powerful positioning strategy.
[00:01:06]
Tell me if this sounds familiar. You're starting a new business, whether that's B2B or B2C. You've either quit your job or you plan to, but either way, you need customers, but you don't have a website. You don't have any social proof or an email list yet. You have brand new social accounts with a couple of hundred followers, mostly made up of friends and family.
[00:01:30]
So why would anyone invest with you? That's when you come to the same conclusion that every other new business owner makes. You will offer your services at a discount to begin with. This will get you some runs on the board, right? Wrong. Let me tell you why this is such a flawed strategy that will keep you forever broke.
[00:01:53]
I saw a green bikini come up on Instagram a few months ago. Green is my favorite color. It also suits me the best. This was the perfect shade of green. And it was also the right shape bikini for my body. Now my Hellenic hips love them, but they need a little bit more coverage than like little pieces of strength.
[00:02:14]
So loved this bikini. I clicked the link to purchase and it took me to a checkout page where I discovered that the price was $29 99. I instantly closed down the browser and I will not be purchasing those bikinis. Why? Well, I am someone who is accustomed to spending $200 minimum on a bikini. A $30 price tag to me says that this product is going to be flimsy.
[00:02:41]
It's not going to be good quality. It's going to shrink in the wash, it's going to discolor. Friends. Pricing is a positioning strategy. For $30, I know I will compromise quality and I'm just not into fast fashion. When you substantially discount your rates as a service provider or as a product based business, you become a $30 bikini.
[00:03:06]
People will buy it, but are they the people that you want? They will never pay $200 for a bikini. The people you actually want to buy your services will be turned off because they are accustomed to paying much more. They will question your quality. So here's what actually happens when we discount, I. One, you find pain in the ass customers who are paying you at a substantial discount, and you will never be able to increase your prices with them.
[00:03:37]
Who wants to pay more for the same thing? They value your services at X. Even if you tell them that it's a short term discount y are there pains in the ass? Because people who pay less than market rates are usually the same people who have very unrealistic expectations when it comes to business. When it comes time to increase your rates, you will need to start over with a completely new audience segment, the $200 bikini buyers, and those people have different needs, different expectations, and different challenges.
[00:04:11]
To the $30 bikini customers, you will have invested time with the wrong people and not even been paid properly. The second thing that happens when you discount is that you will need to take on a lot more customers to make any decent cash. Which means you now have almost no time in your week to get dedicate towards marketing, so you will never build that website.
[00:04:36]
You will never have time to grow the email list or create a social media strategy. You are trapped in this discounting cycle. All right, so what's the alternative? First thing you need to do is do a market analysis to understand the average market rates for your industry, for your products, for your services, and then I want you to charge what you are worth from the start.
[00:05:01]
But invest in your marketing. Anyone who tells you that you don't need any money to start a business is lying to your face. Then I want you to win customers by building and leveraging relationships. Be active in communities. Join groups, and that's how you're gonna win customers. I hear you. I know what you're thinking.
[00:05:22]
And so let's play out this scenario. For argument's sake, let's say that your business has nothing to do with your corporate job, that you just left, or you are changing careers altogether. So you are starting from ground zero, no contacts, no followers, nothing. You don't have anything. Here's what you can do.
[00:05:42]
Pick the cause that is most important to you and volunteer your time with them in exchange for a case study testimonials, shout outs. I work for free regularly for causes that are important to me and that is completely different from discounting. So do I ever discount? Frankly, no. The only exception is that if three people from the same organization decide to join Marketing Circle, I would do a bundle for them.
[00:06:12]
But typically, I am very anti discounting, and I wanna explain why. When new recruits join global brands like L'Oreal, Unilever, Proctor and Greg Gamble, they are often given a book. The book is called How Brands Grow by Byron Sharp. Before you read any other business books, please read this one. I'm going to give one book away to someone who leaves an honest podcast review in the month of March, and this person will be chosen randomly.
[00:06:48]
So if you wanna win a copy of how Brands grow, please leave an honest podcast review.
Marketing Circle Ad
Does your marketing feel like guesswork? Be honest. Join Marketing Circle the membership for female entrepreneurs who wanna nail their strategy, boost their creativity, and create marketing that actually pays off No cookie cutter templates and broken dreams.
Just practical marketing, training, mentoring, and support. Port to help you grow your business. You'll work directly with me, a legit marketing expert, and tap into a brains trust of clever business owners who bring their expertise, ideas, and support to. We are capped at 45 members, so apply to join today.
[00:07:36]
All right, so what does Byron Sharp say about discounting in this famous book? It is seriously one hot take when you discount it conditions people, customers to wait for a discount, especially when they can see it coming like. Black Friday or Boxing Day. Tell me, will you ever pay full price for anything at Witchy or Bonds or Country Road?
[00:08:02]
I know I won't. Based on the evidence collected by the Berg Bass Institute, which is where Byron Sharp works or runs. Customers who buy from a brand when it's discounted do not go on to become high value. Repeat customers they buy once and they will only ever buy at a discount. So it doesn't actually lead to loyalty.
[00:08:26]
Do you know what does lead to loyalty, mental accessibility, your brand being top of mind and positive experiences, which you can only do if you have money to invest in creating those memorable brand assets and a great customer experience. Do we want customers who only purchase from us when we are on discount, maybe for low ticket products and services, like a digital download, but I definitely don't want those customers in Marketing Circle.
[00:08:58]
The other really important reason why I don't love discounts, especially when it comes to physical products, is because it encourages over consumption and our planet is literally drowning in garbage. The big swing, there's an Australian brand called Tubes. T-W-O-O-B-S. They are one of my favorite brands.
[00:09:20]
They make super cute sandals made from vegan and recycled materials. I have two pairs. Tubes is run by two sisters, and they have a very. Clever anti discounting strategy. They are known as a brand who never discounts, but what's more during key shopping periods like Black Friday, they roll out campaigns just like every other brand, but their campaign is about why they don't discount, and so they are meeting fire with fire at the same time as everyone else's relentlessly flogging product.
[00:09:59]
Their campaigns challenge consumerism and make customers rethink our culture of just buying tubes are really clever at showing a side-by-side comparison of what the price of the sandals would need to be if they were going to regularly discount, which basically shows us that they would increase the price.
[00:10:19]
Outside of sales periods, just so that they can decrease the price. And honestly, it all comes out in the wash. You are not getting a better deal when a brand goes on discount. You are just paying more every other time of the year. So can your brand take a stand? I think it's really important that we use our values to drive our marketing strategy, just like tubes have, making waves.
[00:10:47]
Why is Substack gaining traction? It is becoming a really serious player in the newsletter content space. Many experts are shifting from social media to gated communities like Substack, because creating content for algorithms and vanity metrics is draining their creativity. Substack gives creators more control, direct audience relationships, better monetization options.
[00:11:15]
Is it a viable option for small businesses? I think it is, and I'm actually testing it out with this podcast. I've created the Got Marketing Substack, which will work as a backstage pass to this podcast. I will talk about things that didn't quite make it into the episode, behind the scenes insights like needing to get sticky tape for my nipples while I was recording this particular podcast.
[00:11:39]
It will all go into the substack. I will post weekly updates with additional content not mentioned in the episode, share videos and photos, and get to know listeners of this podcast directly via the chat functionality. I would love for you to join us and the details will be shared below in the show notes.
[00:11:58]
Source of Truth, please do your research. Fiona Johnston recently shared a carousel on Instagram about how not to get ripped off, and it was absolutely genius, and I'm linking it below in the show notes. This post was not just about talking about gurus on the internet, but it was actually a really helpful guide in terms of how to do due diligence before you decide to work with someone.
[00:12:31]
I wanna share a bit of a personal angle to this. I once got seriously burned because I didn't do my research. The person who screwed me over had a Wikipedia page and I didn't read it. And I can tell you that every day I have kicked myself for not reading this person's Wikipedia page. Please look people up.
[00:12:53]
Red flags aren't always obvious upfront, and if it sounds too good to be true, it probably is. Alright, friend. That's a wrap on today's episode about discounting. I would love to hear your thoughts. Send us an email and let's chat about it. I've started a substack as the ideal companion to the podcast.
[00:13:14]
It's packed with extra insights, visuals, and nuggets that didn't make it into the episodes. Plus, you can revisit past editions any time if you want more or just prefer to read, you'll love it. Plus it's a place for us to connect. Want the backstage pass to Got Marketing? Subscribe [email protected].
[00:13:38]
Thank you. You listened right up until the end, so why not hit that subscribe button? And keep the good marketing rolling. Podcast reviews are like warm hugs and they're also the best way to support a small business. You can connect with me, Mia FileMan on Instagram or LinkedIn, and feel free to send me a message. I'm super friendly.
