In most countries in Asia —and Thailand being one of them— there is one word that habitually lingers on the lips of most shoppers and corporate purchasing officers: Discount. Most Asians are passionate bargain hunters, relish a long-term conditioned discount mentality, and are constantly on the lookout for cheap bargains. Are you one of them? If so, I respect your choice. And I take note that we’re unlikely to ever do business together. In today’s article, I tell you why and give you the opportunity to reflect on the shadow side of discounts.
If you have cultivated a pronounced bargain hunter mentality, entering an Apple store is a very frustrating experience indeed: Regardless of how much you probe for a discount, you learn that Apple has a fixed price for a given product, and that there are no discounts. It’s take it or leave it – which infuriates hardcore bargain shoppers, triggers comments such as “Apple products are so expensive”, and makes them storm out the Apple store without buying a product. But guess what? Despite its no discount approach, Apple soars. It’s share price has risen from roughly 10 USD in 2000 to over 300 USD, and its current market capitalization of nearly USD 270 bn has made it the world’s top technology company.
At this point, an interesting question arises: Why can Apple get away with it? And to be more precise, how can Apple flourish even in Asia as a company following a no discount-pricing policy? The answer is simple: Apple is one of the world’s most innovative companies, and true innovation leaders don’t need to give discounts. The experience of using Apple’s products and integrated lifestyle solutions such as its online music and apps store iTunes is far superior to many competitors’ products. Hence, millions of high-tech aficionado in Asia and other parts of the world buy Apple products at specified prices and learn to accept that they don’t get any discount.
But why doesn’t Apple give discounts as a matter of principle? As an innovation leader, Apple practices the art of simplicity in all they do. If you’ve ever enjoyed the intuitive user interaction of an iPhone or an iPad, you see simplicity at work: You don’t need to study a manual to use the iPad; you just unpack it, switch it on and use it.
Being not only an innovation leader but also a marketing leader, Apple understands that discounts add complexity to the sales and marketing process. They tend to make prices run out of control over time, thus diminishing a firm’s brand value. Hence, as a user doesn’t need to study a thick manual to operate a new Apple product, an Apple salesclerk doesn’t need to consider a complex pricing and discount scheme either. There are no discounts — there’s just one price.
By intention, I have already decided some time ago that our company Thinkergy – The Idea Company in Asia, will also be known as: Thinkergy – The No Discount Company in Asia. Sounds like a joke, an oxymoron, like insanity, doesn’t it: No discount in Asia? But what seems like twisted logic is rather the result of plausible thinking. Innovation comes at a cost. Innovation leaders need to invest in creating superior, meaningful value offerings, and they need to recover their cost of investment with an appropriate pricing policy. Here are some reasons why as a matter of principle, we’ve decided not to give discounts at Thinkergy:
At Thinkergy, we play on the Wow-level. We create experiential wow-innovation experiences for our clients. We know how to wow, and we want to teach and show other corporations how they can do the wow, too. We believe that a five-star life is better and more fun than a three-star life, and we want to play only with other five-star players who value the wow.
We invest time and money in primary research to get into the mindsets of learners who we train in business creativity and innovation. We use insights from these research findings for designing better innovation solutions and re-adjusting existing innovation offerings to increase their efficacy, thereby also taking into account the cultural specifics of Asia.
Moreover, being an authentic innovation company, Thinkergy does not simply sell the innovation products that others have created. During the past years, we’ve invested a seven-digit US dollar amount in developing, testing and refining our own systematic innovation solutions such as our proprietary X-IDEA innovation method (and related toolbox). We will continue to invest in more systematic innovation methods that we’ve already lined up in our innovation pipeline. And like a manufacturing company that invests in new production machinery needs to consider depreciation cost in its cost accounting, so do we depreciate our new product development investments and consider this cost factor in our pricing.
In this connection, we also invest in registering and protecting the Intellectual Property (IP) that we create, and go after parties that violate it. Being IP focused, we also respect the IP of other value creators, and invest in purchasing the original legal rights in software, fonts, and other resources we use.
Our pricing and related no discount-approach allows us to identify worthy clients with whom we share our time and expertise. We’re not interested in dealing with firms who hunt for the cheap, but rather want to work with counterparties who share our belief of the importance of creativity and innovation for business — and who are ready to commit the necessary investments in building-up innovation capacities and results.
What does this all mean to you and your company? If you are a habitual bargain shopper or a buying officer, I urge you to rethink your attitude towards discounts. If you hunt for the cheap (price), you will get cheap (quality). If you have limited resources, be resourceful: buy less, but at a higher quality. And if you are a company leader, I urge you to start investing in innovation and then stop giving discounts. Follow the one-pricing approach of Apple and Thinkergy. Join us and become a “No discount company in Asia”, too. Let’s join forces and together create a new Asian buyer mindset that appreciates and pays for meaningful value and systematic innovation in business.