It is always nice to give a discount to friends and family but it can really hurt your business if you don’t have a clear policy in place. So who should you give a discount to and how much?

To keep it simple, discounts are for people who fall into the following four categories:

  1. They bring other customers in on a regular basis. These people could be local celebrities to just your regular customers.
  2. People who are likely to become regular or longer-term customers. A quick chat and a few key questions can go a long way in figuring out if the new customer will become a regular.
  3. Filling up slow periods. In almost any business there are slow periods. When you start to notice patterns, it is better to have some business at a discounted rate than no business.
  4. Family and friends.

What type of discounts should you give out?

  1. They are likely to bring other customers in on a regular basis. You could create a discount card for these type of people. Then give discounts like buy one get one free, free item on next purchase, $x amount off.
  2. People who are likely to become regular or longer-term customers: These type of customers could receive one time use coupons such as buy one get one free, free item on next purchase, $x amount off. Then when you start seeing that they are coming back on a regular basis and bring you more business you could upgrade them to a discount card.
  3. Filling up slow periods. Start keeping track of your regular customers and build a contact list. When you know things are slow, call, text, or email your regulars. Offer a good discount to bring them in.
  4. Family and friends. This is where you need to be the strictest. Family and friends might mean well but they might feel they deserve more or special treatment. So it is easy for them to take advantage of you. You could create a discount card for friends and family or again give out discount coupons.

Just remember, no matter what a discount shouldn’t cost you money. A good way to make sure of that is create a policy. Here are a few tips to keeping track of your discounts.

  1. Create a clear and concise discount policy. Any discount and who is receiving the discount needs to be approved.
  2. Create a way to keep track of who has received a discount, on what, and every attached sale.
  3. Review your discount policy every 6-8 months and review who is getting discounts and the resulting sales to see if they should continue to receive a discount.

So remember, keep it simple, create a policy, give discounts to those who will bring in more business. Create certain discounts so they are easy to keep track of.