Why Discounting Stinks

Having talked with many small business owners over the years, I can honestly say that pricing is one of the toughest challenges they face. There is always a sense among business owners that they are pricing themselves out of business or leaving money on the table.

Steve McKee, president of McKee Wallwork Cleveland Advertising, says discounting products destroys brand equity and profitability, but there may be times when discounting can be done wisely "to achieve a limited, well-defined objective." In his discussion of how to discount products wisely, McKee notes: "If you start playing the discount card too much, you're sending a signal that you don't believe your product or service is worth it. And if you don't believe it, who will?" Businessweek