Discounting is a slippery slope. What starts as a tool to close sales or build customer loyalty can quickly turn into a culture that erodes your gross margin and undermines your brand.

When discounts become the norm, customers stop seeing the value of your products and services. They come to expect reduced prices and delay purchases in anticipation of the next deal. Worse, discounting undermines your ability to compete on quality and expertise – the true differentiators in the LBM industry.

Consider the story of an LBM business that regularly offered discounts to close deals with contractors. Over time, those contractors began expecting discounts on every purchase. The sales team, eager to maintain relationships, complied. Soon, the business was operating on razor-thin margins, unable to reinvest in better inventory, tools, or staff training. Customers began to perceive the company as a "bargain" provider rather than a trusted partner for quality materials. They were no longer the go-to place for high-end products and started seeing a decline in both sales and margin dollars. The downward spiral was difficult to reverse.

So how do you break the cycle? First, understand your value proposition and communicate it effectively. Why should customers choose you over competitors? Emphasize service, reliability, and product expertise over price. Second, establish and enforce pricing discipline. Train your sales team to resist the urge to offer discounts and focus on selling value instead. Role-playing scenarios can help them practice handling price objections without resorting to discounts.

Finally, consider creating loyalty programs or volume discounts that reward consistent business rather than reactive, one-off deals. For example, offer tiered discounts for contractors who exceed certain annual purchase thresholds or exclusive perks like early access to new products.

Discounting may feel like a quick win, but it’s a long-term loss. Protect your margins and build customer confidence by staying disciplined and focused on what sets your business apart.

Ready to Build a Stronger Business? Contact Emily Overson Consulting today for a free consultation and take the first step toward increased efficiency, profitability, and team success!