When you mention offering discounts to most home improvement contractors you will start to see the eyes roll. This is for good reason, many aspects of the home remodeling market have very thin margins and offering such discounts can potentially make it difficult to make ends meet especially in the face of changing requirements from clients and unexpected problems with projects. Often, many home improvement contractors are worried about giving a discount because it makes their services seem cheap or even of lower quality in the eyes of their potential customers.
Offering discounts is not always a bad thing, sometimes it actually makes a lot of sense. There are several situations where offering a discount can help grow your business:
Business is slow
Business can be slow for a variety of reasons. Maybe you experience a slow season (winter for many in the north) or maybe there is some external economic factor that influences how much business you get (example: the housing crash in 2008). Some business can be better than no business, even if it is significantly discounted. In these cases, offering discounts to get additional revenue in the door may make sense.
A Prospect that can potentially get you many more clients
All clients are important, but not all are created equal. Some clients may have larger social circles, connections, or friends of people you would like to have as future clients. Doing a fantastic job will help, giving a discount may help even more. Perhaps a customer of yours in charge of the local neighborhood committee. Doing an exceptional job for this client and doing it at a discount may get you many other clients in that neighborhood that you may have not gotten otherwise. But be careful: if you offer a discount to one client, the client they refer may expect a discount as well.
The prospect has the potential to be a repeat customer
If a prospect only needs a one-time-only type job, it may not be worth offering a discount. If you believe a prospect may be a repeat customer who will need many jobs done (especially if they are larger in value), then it may make since to offer a discount initially. In other words, you would be willing to make a little less money now in order to ensure that you make more later on.
A repeat customer is worth their weight in gold. In order to further incentive them to use you, offering a discount for repeat business could give them a solid incentive for continuing to use your services. Repeat customers are also good candidates in providing you with referrals as well so don’t forget to ask them for one using House At Work!