I Discount, You Discount, We Both Lose

Quick Summary
Discounting a product for a limited time has been a tactic borrowed today and ingrained in industries where it makes no sense.  Software is not food, there is no expiration date, no loss if it’s not consumed today.  So why discounting software products?

Back in the 19th century, advertising was regarded as an actual rational activity whose purpose was to convey information and make claims in propositional forms.  This happened in an era when advertising was created using mostly words, and it had the purpose of appealing to understanding rather than passions.

In his book “Amusing Ourselves to Death,” Neil Postman rehearses that in the 1890s, this context was wiped out, first by the massive adoption of illustrations and photographs, then by the non-propositional use of language.  That was also the time when advertisers adopted for the first time the technique of using slogans.

By the turn of the 20th century, advertisers no longer assumed rationality as the main consideration of their potential customers.  “Advertising became one part depth psychology, one part aesthetic theory.  Reason had to move itself to other arenas.”

Strange things happened a while back, right?  Far from stopping this rationality decline, we doubled down.  In the current Digital Age, product advertising became two parts tricked psychology and one part pseudo-rational reasoning.  Logic is pummelled at every corner on the path of choosing to purchase a product or service, while the decision is artificially hastened by an arsenal of tactics such as the sales season.

Price is one of the key factors when choosing a product, and companies learned from psychology how to make it more appealing for the customer.  Textbook examples are prices ending in “9” aimed to extend your budget limit to the maximum (e.g. $1999 is “certainly” NOT two thousand dollars), or huge discounts that nudge your attention to more expensive products, even if it’s very hard to assess the legitimacy (or history) of the starting price.  Your emotional, impulsive brain is invited to take center stage.

Abusing the discount

Going back again throughout history, we know that perishable foods like fish or meat have a short shelf life unless frozen.  And while freezers were not available until recently, it would make sense for traders to sell them sooner rather than later, often lowering the price in tandem with the freshness of the product.

Instead of throwing away edible food, merchants chose to cut their losses, sell it for less, and hope for better luck the next day.  The same happens nowadays with food products where retailers favor to give customers a good deal if they get those products that expire within one or two days.

Discounts make perfect sense in the food industry, transforming waste into a win-win situation for both merchants and customers, each one willing to trade time for value.

Today, we’re living in a world of abundance and permanence.  We don’t need to get software and store it on a shelf for winter.

This scheme of discounting a product for a limited time has been borrowed today and ingrained in industries where it makes no sense, apart from the mere act of selling for the sake of it.

Software is not perishable foods

We live in a different world, one where the marginal costs of creating and storing a copy of a software product are zero.  Only the customer experience and support cannot be easily scaled.  The software maker can calculate and set the price he considers fair for its product, and customers can make an upfront decision to buy it or not, thus allowing for a win-win situation for both of them.

If a digital product does not expire, why do you want to buy it at a discount?

Software is not food (maybe food for thought?).  There is no expiration date, no loss if it’s not consumed today.  There is infinite space on the shelves of our internet to stock all the software you would ever need, with no loss whatsoever.  So why discounting software products?

Ending the discount

We’re a small and independent company with a huge interest in our craft.  We’re able to offer a great experience to a limited amount of customers.  We think it’s impossible to scale the team and the numbers of customers while maintaining the same focus and care.

The prices of the WordPress industry are set in a race to the bottom.  And while the cost of building products is increasing, their average price is steadily going down, shifting the focus on a mass adoption of barely good-enough products.

For our own sanity, we could not stomach not aiming for the best products we are capable of crafting.  We aim to find the right customers willing to pay a fair price for our work.  That’s a healthy relationship we’re willing to put more energy and enthusiasm into, in the long run.

Our overall marketing strategy is far from being focused on discounts, but we ran an annual sales campaign for the past two years.  While it made financial sense, it doesn’t sit right with our goals and dreams.

Not being in alignment with our values and how we want to do business, we decided to stop making any sales campaigns in the future.

There is no reason to raise or lower prices depending on the time of the year.  The software and the experience are the same all year round.  So should be our prices.

The true cost of discount is “care”

There’s nothing wrong, in the absolute, to get a better price for a certain product or buy it at a reduced rate.  The context in which this happens is what matters.

We’re living in times where support for small businesses is paramount to their health and optimal performance.  Profits are smaller, competition is harder, and most of the money seems to pour into ever-larger pockets, draining the small ones.

Getting products or services from independent makers at a discount doesn’t do them any favors, in the long run.  It just distorts their sense of reality and risks derailing their efforts.  If you care about them and want to show your support, make your good intentions matter and don’t squeeze them even further.  Everyone will win, in the long run.

Escape the psychological trap and try to make reason the basis of everything you buy.  Once you’ve found the partners to invest your trust in, pay them their fair price — you trust them after all, right?  You could take it one step further and remind those around you why this is important.  Everyone will win, in the long run.

Discounting a product for a limited time is a most basic trick designed to whip up pressure where it should be none, and “gently” push you into making a quick decision out fear of missing out.

We dare to steer clear of this strategy and start a different movement that will challenge the status quo and bring back what we once had: a more rational and conscious mind to make decisions with.

Have a balanced and sane time, knowing that when you need our products or services, they’ll always be at the same price.

About the Author - George


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