People who ask for a discount are testing the value for money
One of the most vexing types of cost conversations can be when a client asks for a discount. What they are really doing is testing the waters for the value they are getting for their money. This is where you can intervene with communication to make sure the perceived value for the care you provide is not undermined.
This is really important, because discounting the cost of your products and services can put a heavy burden on the practice. Let’s say you sell 100 units of veterinary services with a value of 1,000 dollars a unit. At a 35% margin that comes to $35,000 in revenue for the practice. Discount those services by 10%, and you earn a 21.5% margin, with revenue going down to $21,500.
163 units at a 21.5% margin, versus 100 units at 35% margin!
You see, the stakes are high! Which is why it’s crucial that you become adept in communicating value with clients in order to avoid erosion of your prices and profitability.
