Premature Discounting Is Burning Your Profit | 119

The only person who feels good about an unnecessary discount for your sparky work is the client. I walk through two real examples:

A power pole install and a client’s “30 under 30” discount!  

This episode is about confidence in pricing, understanding where your profit actually comes from, and why uncalculated discounts quietly destroy your bottom line. If you’ve ever knocked money off just to feel better in the moment, this will make you rethink it.

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Transcript

The only one happy with that discount was the client.
 They didn’t even ask for it.

Welcome to Simplified Sparky Marketing.

A few years ago, I was doing a job that included a power pole. I’d never installed one before, so I reached out to a few sparkies to figure out who actually installs power poles and who would be the best person to do it.

One of my mates mentioned a company, so I reached out to them on Facebook. I sent them a message saying, “Hey, this is the address. I’m looking to install a power pole here.” I sent a few photos and asked whether it was a four or six metre pole.

He came back and said, “Cool, it’s going to be X amount.”

It was cheap at the time — I think it was about $500. It was insanely cheap.

They supplied the pole, came out, dug the hole, stood it up, concreted it in, and left. Pretty straightforward job for them. They probably do a few of these a day, so I get why it was relatively cheap.

I also liked their terms and conditions. They basically said if they hit fibre, water, or any other services in the ground, it’s not their problem — it’s yours. Fair enough. Dial Before You Dig is on you.

Anyway, everything went off without a hitch.

But the best part?

They discounted me — even though I didn’t ask for a discount. Which is absolutely fucking ridiculous on their behalf. Of course I didn’t decline it. If I can get it $100 cheaper, why wouldn’t I?

What happened was this:
 When I first reached out, I said, “In a few weeks or a month, I’m looking to get a power pole installed at this address. What does it cost?”

They came back and said, let’s say, $600 plus GST.

I said, “Yep, cool. I’ll reach out when it needs to be done.”

About a month and a half later, I messaged them again and said, “Hey, I’m ready to install that power pole. When can you do it?”

That was me initiating. I was cool with the pricing. Let’s engage.

They replied and said, “Great — we’re actually running a special at the moment. We can do it for $500 plus GST.”

I said, “I’ll fucking take it.”

And it’s ridiculous. I’d completely forgotten about this story, but it’s perfect ammo.

Where are you handing out your discounts for no apparent reason?

The second thing that triggered this was a client I worked for recently. I’d done work for her about three years ago — installed ceiling fans in her apartment. From day one, there were issues. Clicking, cracking — I think it was an Elgato fan. Long story short, it was a bad batch.

I was back there last week replacing one under warranty.

She’s an artist. Works full-time, paints on the side. The bedroom where the fan had issues was now her art room, and she had paintings everywhere. We got chatting about her art — does she sell it, does she make money from it?

She told me she’d been selling them around Christmas and mentioned she had a “30 under 30” discount — 30% off if you’re under 30.

She laughed about it and said the adults would send the kids up to buy the painting, so they’d get 30% off.

I didn’t correct her — her business is her business. But in my head I was thinking, why the hell would you offer that?

If discounts are structured, fine. But they weren’t.

Hypothetically, if she wanted $100 for a painting and listed it at $150 so she could discount to $100 — fine. That’s planned.

But that wasn’t happening. She was taking a hit every single time.

It didn’t phase her much because she has a full-time job — but that’s not the point.

These two stories highlight the same issue.

The power pole company literally took $100, wound down the window while driving, and threw it out. I was willing to pay $600 plus GST. At no point did I question the price. At no point did I ask for a discount.

A lot of sparkies do this.

You offer discounts without your maths dialled in. You haven’t inflated your pricing to allow for discounts.

The big operators who do good, better, best pricing — their numbers are inflated. Membership discounts? Same thing. The standard price is higher, so the discount still works.

But if you discount blindly, here’s what happens.

Say a job is $1,500.
 Materials are $1,000.
 Your profit is $500.

You get nervous and say, “We can give you $100 off today.”

You think you’ve taken $100 off.
 You haven’t.

You’ve taken 20% off your profit.
 You’re now left with $400.

If you got really loose and said, “We’ll do $250 off,” you’ve just cut your profit in half. You’re nearly paying the client to do the job.

That’s how insane it gets when you actually look at the numbers.

Even seasoned operators do this. And often it’s the same people saying, “I’m not really making that much money.”

This could be one of the reasons.

And where it all comes back to is confidence in your pricing.

Crunching your numbers is fucking scary. Real hourly rates. Real working hours. Real profit targets.

I base my days on five to five-and-a-half billable hours. Some days it’s three or four. That’s service and maintenance. That’s the business I chose.

I’m not working late to justify poor pricing.

If someone asks for a discount, be smart. Remove scope. Remove items. Don’t hand over cash.

There is a time and place for discounting — but only when your prices are structured, inflated correctly, and you know your numbers.

If you ever feel the urge to discount, ask yourself one thing:

Am I actually going to make money on this job?

If you want to build your flywheel, there’s a free email mini-course in the show notes below.
 If you’re interested in the Simplified Sparky Mentorship, all the details are below.

Catch you next week.