Customers are begging for discounts but we don’t want to drop our prices. What selling strategies should I use?
If a significant number or customers are begging for discounts, I would be inclined to explore the reasons behind the requests to understand what is actually motivating your customers.
Let’s be honest – we all love a good bargain, it doesn’t matter what we’re buying! Discounting in its different guises can capture the imagination and attention of your customers and at times inspire them to take action.
In saying that, does it work all the time? The short answer is; no. To do anything in excess is ill advised, particularly when offering discounts to customers.
There is no right or wrong answer nor silver bullet to offering your customers discounts, however, there are some basic rules of engagement worth considering:
Rule 1: You discount or you don’t. There is no in-between – discounting needs to be uniform and consistent. Your entire sales team should follow a consistent strategy as opposed to discounting as they see fit. All your customers deserve to be offered the same value, not doing so is simply unethical. Yes, all your customers are that important!
Rule 2: If you must discount, make it exclusive and special to your customers, and limit time frames, and stick to it! Don’t offer the same discount the next month after telling customers it’s for this month only.
Rule 3: If you have a no-discount policy – frame the policy in a manner that empowers the customer.
Example: Customer: Can I have a 10% discount on this product please?
Salesperson: “We have a no-discount policy. Yes, some of our competitors offer discounts on similar products, and you are welcome to explore buying this product from them, but please understand the reason we don’t discount is because we believe the most important element to our ongoing relationship with you is the after-sale service.
“We hire the best people to help customers like you, perhaps a year or two from now, when you would like your product serviced or upgraded, or you simply need to call us to ask us questions. We don’t believe in discounting in any form, particularly when it comes to quality and service.
“Out of curiosity, would you prefer a discount, or less service or value?”
Customer: “I prefer more value!”
Salesperson: “Great, what if I offered you an enhancement to your product, would that help you to buy today?”
The above sales conversation, (albeit generic and simplistic) is framed in a positive tone as opposed to simply retorting “sorry we don’t discount, it’s company policy”. Even if it is your company policy, customers still don’t like being told so; there must to be a benefit in it for them.
Granted, discounting may reduce your customers financial barrier to entry, and it does make sense sometimes when the pressure is on in fiercely competitive markets, however discounting can lead to cascading events such as reduced profit, pressure to keep discounting and therefore requiring compensation in increased prices in other areas, and diminishing your offering’s value perception in the eyes of your customers.
Some offerings lend themselves to discount selling – perishable goods, or products and service that are upgraded or made redundant periodically. The rationale behind this type of selling is, “it’s better to sell something at a 10% profit than a 100% loss”. This makes good business sense; you can also frame the discount as such.
Many companies over-sell their value, which means when their staff discounts an offering it’s less painful from a profit perspective. But customers are wary of the over-zealous discounter; it’s usually a sure sign of an over priced and over valued offering.
The alternative for business owners is to price products or service in-line with fair-value, and then you won’t need to discount to get the deal. Moreover, have a sales process in place that allows your customers to buy-in to your engagement process from day one. This reduces the customer’s need to compare prices or seek a discount.
How many of us have asked for a discount and got it, and then left the exchange wondering, “Hmm, I should have asked for more off!” And if we buy again from the same place we always ask for more off.
Why? Because we know we can, and if we don’t get it we are disappointed. Hey, its human nature; we’re all opportunists when it comes to buying. This makes discounting tricky.
Trent Leyshan is the founder and CEO of BOOM Sales! a leading sales training and sales development specialist. He is also the creator of The NAKED Salesman, BOOMOLOGY! and the Empathy Selling Process.
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Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
