Why We Don't Offer Discounts to Friends or Family Anymore at our Indoor Playground
As small business owners it can often feel like we are being pulled in a million different directions. It can also feel like someone ALWAYS needs something, whether it be a team member or a customer or a vendor.
It’s easy to allow yourself to be stretched too thinly and need to rely on a support system for strength when it gets to be too much.
However, what happens when we are being asked for favors from within our own support system as well?
Now, I’d like to preface this by saying that one of my GREATEST joys as a business owner has been to see my loved ones enjoy my businesses services. It is such an honor to feel like I am making a contribution in their lives and I love being able to spoil them when I’m able.
However, 4 years in, I decided that I would NO longer be offering discounts to my family and friends, specifically for private parties.
Before you write me off as a greedy, money-hungry witch (what can I say, it’s October and I’m in the Halloween spirit!)-- hear me out. I stopped doing this because I care about them and I care about my own physical, mental, and financial health-- and I know that people who truly love me do as well.
Do my family and friends always pay full price? No. I give things away from time-to-time, but under very specific circumstances in order to preserve our relationship. But more about that towards the end.
Here are 4 reasons why I NO LONGER offer discounts for private parties to my family members & friends.
1) We Offer Private Parties-- so a Discounted Party Takes Up the Spot of a Regular-Priced Party
Since our parties are private (and even if they were semi-private) we are faced with an opportunity cost every single time we are asked to discount a party (or discount an event ticket-- since our events nearly always sell out).
Once we say YES to a discount, we are now unable to book that same space and time slot with a full-priced paying client. If we were to discount our services regularly, our entire business would be disrupted.
We rely on a certain number of private, full-priced birthday parties being booked every single month (roughly 20 for us) and even offering just 1-2 of them at a discount decreases the amount we are able to invest back into our business, compensate our employees, and create new programs and offerings.
To accommodate these discounts and still cover our expenses and necessary expenditures, we would be forced to increase our regular price to compensate, which I don’t believe is fair.
Our families and our friends should value the services we provide for them and also the time it takes (time isn’t free, either!) just as much (if not more!) than the general public. Once put in this way, they are usually happy to pay normal prices.
If you are still not comfortable charging full price for friends & family (TOTALLY understandable, especially when you are starting out)-- I have an alternative for you in #3 that I think you’ll like-- so stay tuned!
2) Our Expenses Do Not Decrease When Our Price Decreases
Our prices are crafted carefully with our expenses in mind. You may be thinking, “well, if you’re just providing the space and you’re working the party yourself, it doesn’t cost you anything”. That could not be more false.
Not only, as I mentioned in #1, does a discounted party always take up the spot so that we are unable to book a regular-priced party, resulting in a decrease in our revenue and profit, we have other expenses that you may not even know about.
Sure, there are some obvious (or maybe not-so-obvious) expenses all business owners need to pay like rent and utilities (yes-- it costs money to heat or cool the air during the party and to have the lights and cameras on) but there are also many other lesser-known expenses we are left with behind the scenes.
Taxes, credit card processing fees, our register system, our event booking system, our music system, our security system, the cleaning supplies we use, the dishwasher we are required to use after each event, all of the paper products and napkins and hand sanitizer being used during the event-- yes, it’s a LOT. And that doesn’t include things that parties do not use DIRECTLY such as our accountant, our website costs, our marketing budget, our health department license, etc. etc.
When we discount the price of a party or an event ticket, we are still left with ALL of these numerous expenses and feel like we have a burden on our shoulders because we are now left to pay for all of these with a lower-than-expected revenue, because again, our prices are carefully crafted to meet our expenses and get compensated for our time and effort.
3) We Cannot Offer The Same Level of Service at a Discounted Price
So, let’s pretend, hypothetically, that I’ve agreed to offer a discounted rate for a party for a friend.
Since we already learned that our expenses do not decrease when we offer a price decrease, which can disrupt our business, the logical step I’d likely take is to either work the party myself or decrease the amount of assistance that party receives from my team (for example, I’d schedule 1 party assistant instead of 2 or schedule 2 “junior” party assistants instead of a party lead-host and an assistant.
After all, labor is one of the most expensive aspects of delivering an incredible, private birthday party experience.
If I am working the party myself, I am likely feeling a little resentment, which is not something we like feeling towards family members or friends. I’m not being compensated for my time since I am using my labor cost-savings to cover the discount, and I’d probably rather be spending time with my family or working on money-making tasks in my business.
Not only am I likely NOT doing my best work or delivering a top-notch experience, resentment can build up over time and lead to burnout, which often brings businesses to a halt, especially if you’re making this super common mistake most small local business owners make.
If the labor is decreased in amount of quality, that is also going to decrease the amount of satisfaction all of the party guests (and the host!) will likely have.
So now, whenever I REALLY want to discount a party or offer a deal for a very close family or friend, I don’t.
Instead, I offer them an absolutely FREE party-- with one crucial caveat.
The event will be done on MY terms, and they should have no expectation that they will receive the “full” 5-star experience a full-price paying client would get.
So what does this look like in practice? Well, I would get to choose the time of the event (likely a weekday evening or afternoon-- slots we don’t typically book other parties in) and am very upfront regarding the expectations of service.
I will either work the party myself or schedule a junior party assistant that needs the training and let them know that our regular standards do not apply. They’ll have to cut and serve their own cake, they’ll be responsible for packaging their leftover food up, and I expect the facility to be left as they found it-- cleaned, organized, and cared for.
This may seem harsh, but for me it works perfectly and allows us both to get what we want and need to be successful and happy with the arrangement.
Family or friends who get their parties for free are usually more than happy to take a weekday slot and assign “helper” roles to family and friends so that they don’t need to clean for hours after.
Yes, I am still left with some expenses, but MUCH less than the alternative of discounting a regularly serviced party.
4) It’s Hard to “Draw the Line”
This is where it gets super tricky for most people. Once you start giving discounts for family members and friends, where is the line?
Does your neighbor deserve a discount, even though you only interact on a personal level a few times a year? Does your cousin’s best friend get a discount, even though you’ve never met them?
What about that regular customer who you’ve come to be close with? Or that mom in your daughter’s gymnastics class who is thinking about booking if she can get the “family and friends” rate?
This gets very complicated and can really drain our energy as small business owners. Having a hard-and-fast rule about offering discounts really helps protect yourself AND save your relationships from potential turmoil.
As you can see, the stakes can be high both business and relationship-wise when discounts and money get involved.
So take my advice and have a rule that your comfortable with that allows you to remove much of the emotion from the decision and you will be much more physically, mentally, and financially healthy in the long-run.