On Discounting

One of the Affiliates that I mentor asked me if he should do a LivingSocial deal upon opening his new gym. My response:

"Don't do it.

This is low-quality revenue with uncertain staying power. You want clients that come, pay full price, and never leave. With LivingSocial (and Groupon and all the rest), you'll get clients that come, pay reduced rates, and move on quickly.

Never forget what clients you want. They aren't discount clients. They are fully committed individuals who will become members of your extended family.

You will be tempted to forget this in the face of the need to pay the bills, and you'll go for quick, cheap money.


The lesson here is simple. When you're running a business, don't trade your value for less than it's worth. What you gain in revenue, you lose in staying power. What comes easy, goes easy. 

Further. building a business is hard, slow work. In this age of VC millions and the media's near-worship of fast growers like Twitter and Facebook, Groupon and LivingSocial, this is easy to forget.

Remember that the true giants of industry have been around for decades, not years. They've been built painstakingly, taking the long view. They are castles made of stone, not of sand.

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