It's The Programme EVERYONE Is Talking About
This is Week 1
Intro Heading - Week Number
Sun Heading for the content objective
Intro text
WEEK 01 · THE PROFIT PROTECTION SERIES
The Dangers of Discounting
A 10% discount sounds harmless. It could mean selling 67% more just to stand still. This week, you'll find out what discounting REALLY costs your business, and what to do instead.
Discounting is easy. Recovering the profit isn't.
Someone asks for 10% off. You say yes. You've kept the sale, the customer is happy, and your turnover looks fine. So what's the problem?
The discount comes off your selling price, not your costs. Unless costs fall too, you sacrifice gross profit on every sale.
Sell 5,000 stickers at £1 each. They cost 75p each. You make £1,250 gross profit.
Cut the price to 90p. Your gross profit per sticker falls from 25p to 15p. To earn roughly the same £1,250, you now need to sell 8,334 stickers, not 5,000. That's 66.7% more units.
And that's before considering the extra workload, fulfilment, delivery and potential cash-flow pressure.
There are legitimate reasons to discount: clearing dead stock, filling spare capacity, acquiring profitable repeat customers or releasing cash. The point is not never discount. It's never discount without knowing why and what it costs.
Price matters to customers, but it isn't always the only factor. Speed, trust, quality, convenience, expertise and reduced risk can all justify paying more. Your job is to find out which ones matter to YOUR customers.
Calculate the real cost of YOUR discount
Enter the figures for one actual product or service. Use the direct or variable cost per sale, not your full overheads. The calculator will show the effect on gross profit, not net profit.
Assumptions: selling price is discounted; variable unit cost stays constant; no changes to product mix, capacity, overheads or tax. This is a decision aid, not a full profit forecast.
Find the danger zone
The table shows the percentage increase in unit sales needed to preserve gross profit at different original gross margins. A dash means the discount wipes out or exceeds the original gross profit per unit.
| Discount ↓ / Margin → | 20% | 25% | 30% | 35% | 40% | 45% | 50% | 55% | 60% |
|---|
Look at the highlighted example: a 25% gross margin with a 10% discount means 67% MORE sales just to make the SAME gross profit. On a 20% margin, the same discount requires 100% more sales. On a 50% margin it requires 25% more. The lower your starting margin, the more dangerous the discount.
Ten questions before you give money away
Pick a real discount you currently offer, or one you're considering. Don't answer these in your head. Write them down.
How many customers would have bought at full price anyway? A blanket discount gives money away on those orders too.
Give the customer more. Give away less profit.
A customer asks for £50 off a £500 job. Instead of surrendering £50 of revenue, could you offer something they value at £50 that costs you substantially less to deliver?
Perhaps priority scheduling, installation, a useful add-on, training, extended support or a bundled service. But check the actual cost. A £50 add-on that costs £45 to supply is hardly a masterstroke.
When someone says: “Can you do anything on the price?”
Try this: “I can certainly look at the options. Before we change anything, can I ask what you're comparing us with? I want to make sure we're looking at the same level of service and outcome.”
Then listen. Don't rush to offer a discount that wasn't necessary.
The best discount negotiation often starts with a question, not a number. Understand the objection before changing the price.
Would this promotion actually pay?
Before running a promotion, work out whether the extra sales could actually justify the discount. Estimate the additional revenue in month one, over a full year and across the customer's lifetime. Then decide how many new customers you would need and what evidence supports your assumptions. Don't confuse hopeful sales forecasts with a profitable promotion.
Knowing isn't doing. Now do something.
One week. One action. A measurable result. No 47-point strategy document that sits in a drawer.
Finish your workbook
Your personalised workbook contains the lesson, your calculated results, answers, decision and 7-day action plan. Use the button below to download your finished PDF directly.
Before the next customer asks for a discount, know your gross margin, your walk-away point and the value you can defend. Stop treating your margin like a charity donation.
The Magnificent Seven Growth Numbers
Turnover and profit are results. Next week we'll examine the numbers that actually drive them, and how small improvements across your business can compound into serious gains.
Your next module will be released through Podia. Complete this week's action before moving on.
SEE WHAT SOME NICE PEOPLE ARE SAYING ABOUT my STUFF
Testimonials And Nice Things About My Book
I have been running my own business for over 10years now and I took away numerous nuggets that I will be implementing in my business.
Cost me £9.99 and 1 week of reading but I believe will add value of tens of thousands of pounds....actually scrap that..... some of the things in this book may just save MY business one day!
I cannot explain how refreshing I found this book. Often business books talk all about what you HAVE to do for a successful business - well this book flips that on its head. The author is so honest about ALL the mistakes made in his business that you cannot help but sit up and take notice. Lot's of humour and examples thrown in for good measure makes this a really readable book. Totally recommend to anyone on a business journey.
A business book that makes you smile and laugh out loud. Sound business advice delivered with honesty, humility and humour.
Stuart is refreshingly honest about the mistakes he made first time round and I think they are mistakes that any of us could/would make/are making. With this book Stuart gives us the opportunity to be "wiser" and learn from his experiences.
