Every November, inboxes explode with Black Friday deals, urging us to shop now or miss out forever. For many businesses, it’s the ultimate sales push. But for SMEs, especially those in the service or trade industries, the question is: does it really make sense to join the frenzy?
While big brands chase market share with flashy discounts, SMEs should be focusing on something far more sustainable—profitable growth. Let’s dive into why loyalty, not discounts, is the smarter play for your business.
At first glance, chasing market share seems like a no-brainer. The more customers you have, the bigger your slice of the pie, right? But there’s a catch—market share doesn’t guarantee profitability.
Market Share:
Prioritises attracting as many customers as possible, often through aggressive pricing strategies like discounts or loss leaders.
Relies on volume to make up for smaller profit margins.
Works best for large-scale companies (think Spark, Sky, or even Xero) with deep pockets and the ability to absorb short-term losses.
Profitable Growth:
Focuses on maximising the value of each customer, rather than simply acquiring new ones.
Encourages sustainable strategies like repeat business, referrals, and increased spending from existing customers.
Suits SMEs that don’t have the resources to compete on price alone.
SMEs should resist the temptation to copy big brands and instead build a loyal customer base that values quality and service over a fleeting bargain.
Offering discounts may seem like an easy way to attract customers, but it comes at a cost:
Reduced Profit Margins: Lower prices eat into your profits, leaving less room to reinvest in your business.
Attracting Price Shoppers: Discount-hunters aren’t loyal. As soon as a competitor offers a better deal, they’re gone.
Neglecting Existing Customers: Slashing prices to attract new business can make loyal customers feel undervalued, especially if they’re not offered the same perks.
Instead of cutting prices, ask yourself: how can I add value to my loyal customers?
Loyal customers don’t just come back—they spend more, refer others, and become advocates for your brand.
Here are three strategies to build loyalty while maintaining profitability:
🟠 Invest in Relationships:
Reward your loyal customers with VIP treatment. This could be exclusive access, priority service, or personalised thank-you's. Make them feel special—not like they’re funding discounts for newcomers.
🟠 Focus on Quality AND Service:
Customers return to businesses that consistently deliver exceptional experiences. Whether it’s top-notch craftsmanship, fast response times, or a friendly smile, focus on the things that set you apart.
🟠 Stand Out With Extras:
Surprise and delight your customers with value-added services. Offer free advice, helpful resources, or follow-up care. These gestures strengthen relationships without cutting into your bottom line.
Unlike market share, loyalty doesn’t rely on razor-thin margins or costly advertising campaigns. Loyal customers:
Cost less to retain than acquiring new ones.
Spend more over time as they trust your brand.
Refer others organically, giving you free word-of-mouth marketing.
This is how SMEs achieve profitable growth—growth that’s sustainable and rewarding, not just a short-term sales hit.
If your business is service-based or in the trades, discounts may not align with your long-term goals. While retail giants can afford to play the volume game, SMEs should focus on their strengths: personal relationships, outstanding service, and customer loyalty.
So, before you discount your services, ask yourself:
Are you chasing short-term market share or building lasting relationships?
Are you adding value to your loyal customers or eroding trust with constant discounts?
Loyalty isn’t flashy, but it’s powerful. It’s the foundation of profitable growth, and it’s what will set your business apart from the competition.
Focus on delivering exceptional value, fostering relationships, and building trust. Not only will your customers thank you, but your bottom line will, too.
If you are willing to put in the time and effort required to learn and implement strategies that will help your business thrive, get in touch!
I’ll set up a zoom and get to know more about your business!
Not quite ready for that but know this is the year to improve your business? Sign up here to receive my weekly email - practical business tips and tricks.