Business | Knowledge
THE DANGERS OF DISCOUNTING: WHY CHOPPING PRICES CAN WRECK YOUR PROFITS
WITH DISCOUNTING AN EASY WAY TO DRAW IN CUSTOMERS, STUART MASON, FOUNDER OF HERE’S HOW TO,
TALKS ABOUT HOW TO BE SMARTER WHEN IT COMES TO SLASHING PRICES.
There’s a familiar sound in the graphics world, it’s that sharp intake of breath when a customer says: “Can you do it cheaper?”. The problem is, someone usually does. It’s a phrase that’s sunk many a good business, because while offering a small discount might feel like you’re winning the job, the maths says otherwise. Let’s look at what really happens when you knock money off your price.
THE HIDDEN COST OF A ‘SMALL’ DISCOUNT Suppose your business runs with a 30% profit margin. Now imagine you offer a 25% discount to win a job. That might not sound catastrophic. But that entire 25% comes straight off your bottom line. You don’t save any costs by offering that discount, your materials, labour, rent, and energy bills don’t magically shrink to match. So, if you used to make 30p profit on every £1 of sales, a 25% discount wipes most of that out. In fact, you’d now need to sell five times as much just to make the same profit you were making before the discount – five times. That means if you were comfortably producing £1,000 a day’s worth of signage, you now need to churn out an extra £5,000 worth just to make the same.
WHY IT CATCHES SO MANY OWNERS OUT The trap is easy to fall into because discounting feels like action. You’ve got a quote out, the customer’s
20 | Dec 2025/Jan 2026
hesitating, and you want to get the job, so you knock off 10% ‘just this once’. But ‘just this once’ quickly turns into ‘just one more’. Soon, you’ve trained customers to expect it. They start saying things like: “What’s your best price?” or “Can you match what the other guy’s doing?” And before you know it, your margins are a memory, your bank account’s gasping for air, and you’re working late to make up the volume. Bonkers when you say it out loud, isn’t it?
Discounting also attracts the wrong type of customer. You know the ones, they haggle over every penny, want everything yesterday, and never seem happy. They’ll push for a discount this time, and next time they’ll want even more off because they’ve been loyal customers. Then they complain. Meanwhile, your best customers, the ones who value quality, reliability, and good communication drift away because your focus is elsewhere.
WHAT TO OFFER INSTEAD OF A DISCOUNT The good news is, you can still win business without cutting your prices. The trick is to add value rather than subtract profit. Here are a few ways to do it:
1. Bundle it
Instead of offering 10% off, offer a bonus. For example: • Order two pull-up banners and we’ll include a free design.
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