Discounts, deposits, off-peak rates and add-ons

What you will be able to do

• Calculate how many extra bookings a discount requires to break even
• Design published off-peak rates that fill empty dates without training clients to haggle
• Write a payment schedule, add-on menu and discount policy for your business

Discounts, deposits, off-peak rates and add-ons look like small administrative choices. Together they decide how much of your price you actually keep. A careless discount can wipe out a month’s profit, a weak deposit policy leaves your best dates exposed, and a good add-on menu can lift your average booking without a single extra event. Treat each one as a deliberate marketing decision with a written rule behind it.

Read the transcript

Discounts, deposits, off-peak rates and add-ons.

Discounts, deposits, off-peak rates and add-ons look like small administrative choices.

Together they decide how much of your price you actually keep.

What a discount really costs.

A discount comes straight out of your contribution, the money left after the direct costs of the booking.

That is why a 10 percent discount costs far more than 10 percent of your profit.

Better than discounts: give, remove or move.

When a client pushes on price, you have three alternatives to cutting the number.

Add an item that is valuable to the client and cheap for you, such as an extra half-hour of coverage on a day you are already there, or a set of sneak-peek photos within 48 hours.

Off-peak rates: sell the empty dates.

Event businesses have perishable stock.

An unbooked Saturday in July is lost forever, and so is an unbooked Tuesday in February, but they are not worth the same.

Deposits and payment schedules.

A deposit, or retainer, does two jobs.

It turns a verbal yes into a commitment, and it compensates you for turning away other clients for that date.

Add-ons that lift the average.

An add-on is a priced extra that a client can take or leave without changing the package.

A short, well-chosen menu raises your average booking value without more events.

That is the lesson. The worksheet and the quiz are just below this video.

What a discount really costs

A discount comes straight out of your contribution, the money left after the direct costs of the booking. That is why a 10 percent discount costs far more than 10 percent of your profit.

Take a wedding photographer whose most popular package is $3,000 plus HST. Direct costs for one wedding, including a second shooter, editing help and travel, come to $600. Each booking contributes $2,400. Now offer 10 percent off. The price drops to $2,700, but the direct costs stay at $600, so contribution falls to $2,100. To earn the same total, the photographer needs $2,400 divided by $2,100, or about 1.14 times as many bookings. In other words, 14 percent more weddings just to stand still.

The formula: extra bookings needed equals the old contribution divided by the new contribution, minus one. Run it before you agree to any discount, and the answer is usually “no, but here is something else”.

Better than discounts: give, remove or move

When a client pushes on price, you have three alternatives to cutting the number.

• Give something. Add an item that is valuable to the client and cheap for you, such as an extra half-hour of coverage on a day you are already there, or a set of sneak-peek photos within 48 hours.
• Remove something. Offer a smaller scope at a lower price. “To reach $2,400 we would drop the second shooter and the album.” The client sees that your price is tied to real work.
• Move the date. Point them to an off-peak date where your published rate is genuinely lower.

Keep a short list of situations where you do discount, decided in advance: repeat clients, registered charities, multiple events booked together. A rule protects you from deciding under pressure on a call.

Off-peak rates: sell the empty dates

Event businesses have perishable stock. An unbooked Saturday in July is lost forever, and so is an unbooked Tuesday in February, but they are not worth the same. An off-peak rate is a published price for dates that do not sell at your main rate. Because it is tied to the date, it does not train clients to haggle.

Here is an example from a small west-end event space, illustrative only. Its Saturday evening rate is $3,700 all-in, plus HST, and Saturdays from May to October are nearly always full. Fridays book about half the time, Sundays rarely and winter weekdays almost never. The owner publishes four rates:

• Saturday, May to October: $3,700
• Friday, or any Saturday from November to April: $2,900
• Sunday: $2,600
• Monday to Thursday, January to March: $1,800

If the Sunday rate fills eight Sundays a year that would otherwise sit empty, and each booking costs the venue about $500 in staffing and cleaning, the off-peak rate adds 8 times $2,100, or $16,800, in contribution. None of those clients would have paid $3,700.

Planners, performers and photographers can do the same with weekday corporate rates, winter wedding rates or a lower price for events that finish by 9 p.m. Show these rates as their own line on your price sheet, not as a “sale”.

Deposits and payment schedules

A deposit, or retainer, does two jobs. It turns a verbal yes into a commitment, and it compensates you for turning away other clients for that date. Choose one word, define it in your agreement and use it consistently.

A common structure is a payment at signing, one or two instalments, and the balance shortly before the event. Lantern & Lane uses this schedule for the Two-Tradition Weekend at $9,800 plus HST:

• At signing, 30 percent: $2,940 plus HST
• 90 days before the first event, 40 percent: $3,920 plus HST
• 14 days before the first event, 30 percent: $2,940 plus HST

Collecting the balance before the event means nobody has to chase money after the last dance. The size of the first payment should reflect the real risk. A planner booked eighteen months ahead for a June Saturday is turning away more than a magician booked three weeks before a Thursday office party. Whatever you choose, state in writing what happens to each payment if the client cancels, if you cancel, and if the date moves.

Add-ons that lift the average

An add-on is a priced extra that a client can take or leave without changing the package. A short, well-chosen menu raises your average booking value without more events.

A DJ who plays 40 weddings a year offers dance-floor uplighting at $350, with a direct cost of about $60. The share of clients who take an add-on is its attach rate. At an attach rate of 30 percent, that is 12 bookings and 12 times $290, or $3,480, in extra contribution, for equipment the DJ already owns.

Good add-ons are easy to explain, relevant to most clients and high in margin. Offer them twice: in the proposal, and again about 60 days before the event, when clients are finalizing details and often have budget left.

A pricing policy you can copy

1. Discounts: We offer [amount] to [repeat clients, registered charities, multi-event bookings]. We do not discount otherwise.
2. Off-peak rates: Our rates for [days and months] are [amounts], published on our price sheet.
3. Payments: [Percentage] at signing, [percentage] by [date], balance [number] days before the event.
4. Cancellation and date changes: [What happens to each payment, in plain words.]
5. Add-ons: [Three to five items with prices], available until [deadline].
6. Records: We keep the date, amount and reason for every discount and promotion.

In Canada and Ontario

“Save” and “was” claims need real reference prices. If you advertise a discount against your regular price, the Competition Act requires that regular price to be genuine. Under the Act, a supplier that states its own ordinary price must have sold a substantial volume at that price or higher within a reasonable period, or offered it in good faith at that price for a substantial period. The Competition Bureau’s tests are that more than 50 percent of sales were at that price or higher, usually within a year before or after the promotion, or that you offered it in good faith at that price or higher for a substantial period, usually within a year immediately before or after. If nobody ever books your Sunday at the Saturday rate, “Sundays: save $1,100” is a risky claim. Publishing a separate Sunday rate is cleaner and needs no reference price. Keep records of promotion dates, discounts and regular prices. The Bureau explains the tests on its ordinary selling price page.

Mandatory charges stay in the price. A discount does not change the drip pricing rule. A promotional price must still include every fixed mandatory fee, with only taxes such as HST on top.

Deposits, cancellations and consumers. Most event bookings are future performance agreements under Ontario’s Consumer Protection Act, 2002, which remains in effect until the 2023 Act is proclaimed: the client pays now and you deliver later. Ontario’s Business Guide says that if delivery is more than 30 calendar days after the agreed date, the consumer may cancel and get a refund. When a consumer validly cancels, the business must refund in full within 15 calendar days. Any uncertainty in a consumer agreement is read in the consumer’s favour, so vague deposit terms work against you. The official guidance does not set specific rules for non-refundable deposits on event bookings, so have a lawyer review your deposit and cancellation clauses rather than copying a competitor’s wording.

Bars, caterers and food trucks selling alcohol. Liquor promotions follow the AGCO’s rules, not general marketing practice. Licensees may advertise prices and happy hours, but drink prices including taxes cannot fall below $2.00 per standard drink, or $1.34 for spirits over 14.8 percent alcohol. A happy hour must keep prices at or above that minimum, be posted or given to patrons, and apply equally to everyone; promotions aimed at groups such as students or women are not permitted. “2 for 1” drinks and similar purchase-linked offers are prohibited under all circumstances, and so are gifts or chances at a gift that require buying liquor and frequent-buyer offers. At sale Special Occasion Permit events, prices must stay the same for the whole event, so there are no happy hours. A drink package as an add-on to a catering quote is fine if it respects these limits. See the AGCO’s pricing and promotion rules.

GTA practice notes

The GTA calendar sets your off-peak periods for you. For many vendors, Saturdays from June to September and the weeks before the December holidays sell themselves, while January to March is quiet for weddings and busy for planning. That makes winter the right time to sell next summer at full price and to fill this winter at off-peak rates. Corporate demand has its own rhythm: holiday parties book in late summer and early fall, and some departments look to spend remaining budget before their fiscal year closes. Cultural celebrations such as Diwali, Lunar New Year and Eid create peaks for caterers, décor companies, DJs and performers who serve those communities, so check the dates each year, because several move on the Gregorian calendar. Price those weeks as peak dates. This is general information, not legal advice.

Worksheet

Download the worksheet and complete it for your own business, using Lantern & Lane as the model where it helps. Keep it with your marketing plan. It takes about 10 minutes.

Download the worksheet (PDF)