Discount Pricing: How to Price Competitively While Protecting Profit

Originally published in October 2020 Last updated on March 11, 2025.

Thinking about using special offers to attract new customers to your service business? Be careful. Pricing too low can leave you with empty pockets. 

Offering discount pricing is a great way to attract new customers, but only if it doesn’t eat up all your profit. Learn how to balance pricing and profit effectively so you have room to grow your service business using these methods.

1. Tiered pricing

Also known as good, better, best pricing, tiered pricing is when you offer customers different levels of service to choose from. These packages are typically divided into basic, standard, and premium options, allowing the customer to choose the one that works best for their needs and budget. 

For example, a cleaning business may offer: 

• A basic package that includes dusting, vacuuming, and surface cleaning
• A standard package with the above plus bathroom cleaning
• A premium package covering all of these services as well as deep cleaning appliances and washing windows

The most expensive tiers are usually discounted to make them more appealing, encouraging customers to opt for a higher level of service. This strategy boosts the average value of each job while still providing additional value to clients without eating into profit.

2. Bundle pricing

Bundle pricing is when you offer clients add-ons to their services at a discounted price. 

For example, a pressure washing business might bundle together services like deck washing, driveway cleaning, and gutter clearing for a lower price than if a client were to book each service separately. 

Like tiered pricing, this upselling technique increases the overall value of each job without negatively affecting profit.

3. Seasonal discounts

Seasonal discounts are when you offer discount pricing during the off-season. They help fill up your schedule and generate work when things are slow. 

For example, landscaping businesses that offer aeration and fertilization in the fall and early spring can bring in additional income by offering small discounts to attract early bookings.

4. Promotions

Promotions are special discounts offered on specific services for a limited time. They’re often used to draw attention to new services or fill up schedules during a specific period. 

For example, a lawn care company offering winter snow removal for the first time might offer promotional discounts to any customers who sign up for a seasonal subscription before November 1st. That way, they can promote their new services while locking in recurring income before the busy season starts.

5. Referral discounts

Referral discounts reward customers who send work your way. Like giving them a small discount or free gift for every completed job they refer. 

The more you focus on providing high-quality work and customer service, the more referrals you’ll get. 

And because referrals are one of the most cost-effective ways to generate leads, having a referral program in place can help you build a client base without having to spend a ton of money on advertising. 

You can even use referral software like Jobber to automate referrals for you. That way you can: 

• Promote your referral program through email campaigns
• See how many jobs have come from referrals and how much revenue those jobs have brought in
• Track who your biggest supporters are so you can thank them

6. Non-monetary discounts

Discounts don’t have to be money off a service. They can also be free products or services, like free fertilizer, a branded duster, or complimentary window cleaning. 

These are often used to reward customer loyalty and referrals without cutting directly into profit. 

READ MORE: Customer referral program ideas

7. Loyalty discounts

Loyalty discounts reward clients who book your services a certain number of times. 

For example, they could receive a free service for every ten appointments they book or a discounted service after five consecutive bookings. 

This type of discount encourages customers to stay with you for longer, providing reliable cash flow.

8. First-order discounts

First-order discounts attract new customers by offering them a reduced price for the first service they book with you. This can be for first-time customers, or for existing clients who book a new service you’re offering.

9. Subscription discounts

Recurring jobs like lawn maintenance, house cleaning, or dog walking make for predictable income, making them one of the best kinds of jobs to book. 

Offering discounts for long-term subscriptions, like seasonal or ongoing work can encourage more customers to hire you for recurring jobs, getting you more stable cash flow and keeping your schedule full.

10. Affinity discounts

Affinity discounts are offered to special groups, like military personnel, students, and seniors. They’re a way to give back and show appreciation for specific communities and can help to attract loyal customers.

11. Customer reactivation discount

Service providers can also use discounts to encourage previous customers to book a new appointment. 

For example, you could offer a small discount, like 10%, to past customers who haven’t used your services for six months to generate new bookings.

12. Customer service discounts

Then there are customer service discounts that may be offered to customers for a variety of reasons. For example, you may discount a customer for: 

• A mistake, like a double booking or delay
• Completing some of the work on their own, like prepping the job site
• Material shortages or stock issues
• A previously unsatisfactory job to regain their trust

These discounts are usually only applied on a case-by-case basis and should only be used in special circumstances.

Discount pricing pros

Lots of businesses use discount pricing because of the many benefits it offers, such as: 

1. It attracts new customers

Discount pricing entices leads to try your services for the first time, increasing bookings and potentially leading to long-term contracts and ongoing work. 

For example, some customers may be hesitant to have someone come in for weekly lawn care because they’re used to doing it themselves. Offering a discount can lower the barrier to entry, convincing them to give it a try. If you do a great job and highlight your value, they’re more likely to stick around and become loyal clients, turning a one-time discount into recurring income.

2. It helps with customer retention

Loyalty discounts, bundle pricing, and special subscription offers keep customers coming back by giving them a reason to continue booking with you. 

This is especially true for service businesses that offer ongoing services, like house cleaning, seasonal lawn care, pool cleaning, or dog walking. 

And, the more you work with a client, the more of a relationship you develop, leading to referrals, repeat business, and positive reviews—all things that help you grow. 

3. It fills out your schedule

Seasonal and off-peak discounts fill out your schedule and boost income during slower periods. They’re also an effective way to handle last-minute cancellations. 

For example, a landscaping business could offer winter prep or aeration services during their off-season at a discounted price to bring in additional income. Or you could offer limited-time discounts to nearby clients when someone cancels to recoup costs and keep a full calendar. 

4. It increases customer lifetime value (CLV)

Acquiring new customers is often the most expensive part of running a business. By using discount pricing to encourage repeat business, referrals, and loyalty, you increase your customers’ lifetime value. This means you spend less money to get more business over time.

5. It boosts word-of-mouth marketing

Word-of-mouth marketing, such as referrals, is one of the most cost-effective lead-generation strategies. But to benefit from it, you need to make your services worth referring to others. 

For example, by offering loyalty, first-time, referral, bundle, or subscription discounts. 

That won’t be enough to convince customers to recommend you to others, though. You’ll still need to showcase your skills by providing excellent work and putting customer service first. 

6. It gives you a competitive edge

Sometimes there are obvious differences between you and your competitors. You might serve different subsets of customers or offer unique services that set you apart. 

But that’s not always the case. 

If you have competitors that target similar clients for the same services, you need a way to gain a competitive edge. Discount pricing can provide the extra boost you need to swing customers your way. 

For example, first-order, seasonal, subscription, and affinity discounts can encourage new customers to book with you over your competition.

Discount pricing cons

Discount pricing isn’t all positive, though. Without a strategic approach, it can have negative impacts on your business, such as: 

1. It reduces profit margins

Discount pricing cuts into your profit margin, reducing the money you have left over at the end of a job. And if you aren’t careful, deep discounts can eat into the money you have to cover overhead costs and operating expenses, leaving you in the red. 

Even small discounts equate to less profit on each job, so it’s important to use job costing to track how much each job costs and make adjustments as necessary. 

You should also set healthy profit margins from the outset by choosing an effective pricing strategy. That way, you’ll know how much wiggle room you have to work with when it comes to offering reduced prices. 

2. It can devalue your services

If you offer too many discounts too frequently, you may come off as a discount service provider. And if that’s not what you’re going for, it may attract different customers than you’d like to attract. 

For example, customers with smaller jobs and budgets, or those who are more likely to haggle or nickel and dime you. 

Instead, offering discounts to certain customers for specific things keeps discounts strategic and intentional. This approach helps you bring in the right customers and rewards them for loyalty, referrals, or service subscriptions while maintaining your service’s perceived value.

3. It requires more work

Since discount pricing impacts profit, you need to track it so you don’t lose too much money. 

That means staying on top of each discounted service and reviewing how much it costs to complete, what the client paid you, and how much was left. If you were left with little to no profit, you’ll need to make adjustments before discount prices impact your bottom line. 

This is true even with seasonal, one-time, and special discounts. Any discount you offer, no matter whether it’s for a limited time or it only applies to a specific service, will need to be tracked and analyzed so you don’t lose money. 

4. It can influence customer expectations

If you discount too many of your services for too long, customers may come to expect lower pricing, making them hesitant to pay full price. 

That’s why it’s important to only apply discounts if and when it makes sense and to clearly outline the terms from the very beginning. 

For example, by offering a new customer discount that only applies to the first service they book and including it in the terms of your agreement.

Using discount pricing in your service business

With the right pricing strategy in place, discount pricing brings in, rewards, and attracts customers, leading to a fuller schedule, better cash flow, and long-term growth. 

With quoting software like Jobber, you can easily include discounts, tiered pricing, and bundles in your quotes. Then you can track their success with Copilot so you can make informed decisions about which discounts are having the biggest impact.