Why I don’t discount my products
In 2014, we launched the Pro membership program at Trading Paints — which, for $24/year, extends the traditional free membership we’ve always offered users since our initial launch in 2010.
Some people ask me when we plan to offer a sale or discount on Trading Paints Pro memberships. It’s a simple answer — never.
Discounting products, despite the possibility of a short-term boost in sales, comes with harmful long-term effects.
For starters, discounting devalues the product. If, at any point, we held a sale and sold Pro memberships at, say, 50% off — $12/year — it would have become perceived as a product that’s worth $12/year — because that’s what people are truly paying for it. Even if we said the price was normally $24/year, the value still registers as half of that since no one is actually paying full price.
Except for the people who already have paid full price, that is.
That’s because discounting products screws over early buyers. What a terrible thing to do! You’ve probably been in a situation where you paid full price for something you like, only to see it go on sale a month later. It sucks — you feel cheated. You feel like you paid a tax for purchasing early — like you spent more than you should have. It takes away from your enjoyment of that product since you know you could have bought it for less from the middle-finger bin if you had just waited.
Why penalize your first customers for buying when they did? Those first buyers are often your most loyal. Don’t screw over people who bought from you early.
That’s the other thing. Discounting causes people to hesitate buying when it’s not “sale time”. Buyers aren’t dumb — if there’s an opportunity to get something cheaper, they’ll do it. For many people, that means waiting for something to go on sale and not purchasing right away.
If devaluing your product and and screwing over your loyal customers isn’t enough, realize that discounting turns you forever into a discount brand. When you begin discounting your products, instead of competing on value, you now compete on price.
There’s no recovering from this.
Remember when JCPenney tried replacing discounts and promotions with an “everyday” price? It failed. Hard. That’s because JCPenney’s customers, over decades, were trained to buy their clothing for less than the price on the sticker. When those customers were suddenly forced to begin paying a discount-free “full price”, they responded by not buying, even though the new price was comparable to the old “discounted” price. Today, JCPenney is back to their longstanding tradition of offering coupons and discounts, and it’s working for them — because they compete on price. They’re a discount brand, not a premium brand.
By refusing to discount our products, Trading Paints retains the flexibility and prestige that comes with being a premium, discount-free brand.
There’s one exception to this rule, however. At Trading Paints, the only people who don’t pay full price for their Pro memberships are our early, loyal supporters — the small group of people who actually went out of their way to donate to fund our service in our early days before we introduced the Pro membership program.
These few great folks felt the value we were providing for free was worth giving up their own money for nothing in exchange. We remembered that, and we’re still showing them our appreciation for that loyalty and support years after the fact. It’s a core value to Trading Paints and to me as a professional to always reward loyal supporters and customers.
By refusing to discount, we’ve built a sustainable product that people are happy to pay to use. Our users never ask when Pro memberships go on sale, and our product has the same $24/year value to all of our customers, whether they purchased on launch day, Black Friday, two months ago, or today. Instead of desperately promoting sales to try to drum up a few dollars, we get to promote new features and ask how we can delight people further through our product. Our users are focused on the features and the value the Pro membership provides instead of worrying about what to pay for it.
If you plan to launch a new product, don’t discount it. It’s tough, but the perceived short-term benefits of discounting are not worth the long-term damage to your brand and your customers.