“But THAT is NOT all” – annoying salesman 101
While the phrase above is 100% not the way to do it, bonuses are probably the least bad kind of discount.
Because they ARE discounts, technically. A “bonus” is an increase in quality of service that does not change the nominal value of the sale.
So the client ends up paying the same for more value, meaning they effectively pay less per unit of value delivered – a.k.a. a discount.
That said, “classic” discounts have at least two traits that bonuses don’t suffer from:
1. They harm the value perception, especially for intangible or expertise-based services. Do you often buy discounted boxes of medicine pills? Why not?
2. They reduce the immediate revenue gained from a sale. Sometimes, keeping that 20% can mean a lot.
There’s also the behavioral aspect.
[Gains are generally viewed as better than losses, even if the economic value is the same]. To illustrate:
– Discount: The service is priced at $100 but with a 50% discount, the consumer pays only $50
– Bonus: The service is priced at $100 but with a “buy one, get one free”, where the consumer pays $100 for the first but $0 for the second.
In both cases, the client pays the same $50 per unit, but the second one seems like a better deal.
A service is almost always better off attracting clients with a bonus instead of a discount. _Just don’t let the bonus be a set of steak knives, and you are good.