Discount – Is It Really Worth It?
Has anyone ever said to you, “I’d like a discount.”? Yes, you say. Then let’s look at some ways of handling this, and maybe even managing to make a bigger sale in the process.
Just to be clear, there is a right way and a wrong way to give a discount to your customers. Let’s imagine that your potential customer has just asked for a discount and in this instance you have caved straight away and said yes.
The chances are that the customer is now thinking to themselves at least one of the following;
• You seem desperate for the sale
• I wonder how far you will lower your price…maybe I should ask for an even bigger discount.
• The price you originally offered mustn’t have been the real price. Are you trying to trick me? Can I really trust you?
• You don’t set a very high value on your own services if you are prepared to discount so quickly.
• So you agree that your price is too high, that’s a bit of a worry!
• Next time I come to buy anything from you, I should ask for a discount again.
The problem with just giving a discount is that you have given something away and have not asked for anything in return. You’ve just created a win/lose situation in which the customer is the winner and you are the loser. Not only that but you may have actually lost the sale by potentially damaging your credibility with this person.
Here’s a thought, instead of agreeing to the discount straight away, ask them why they want a discount. Their response will help you to understand what their motivation really is, and gives you more leeway in your response.
If money is the reason behind them asking for a discount, then you could offer to lower the price by removing something of value from the product/service they are thinking about buying. You could say something along the lines of “If price is an issue for you then I suggest we take the XXX product out”, make sure you suggest something of high perceived value. The customer needs to see that in order to get the discount they have to give up something, that there is a price for reducing the price! If you want to soften the blow you could make a few suggestions for things to leave out or ask them for their ideas, thus gaining an understanding of what is important to them.
Another approach is to give a discount in exchange for something in return. You can create a win/win situation with this. An example would be lowering your service fee in exchange for an agreed upon number of billable hours, ie “I am prepared to reduce my hourly rate from $200 to $180 if you agree to an initial 50 hours of consulting.” Or you could reduce the amount if the customer agrees to buy from you within a certain time period. The main thing with this approach is to make sure that the customer is perfectly clear as to why you are prepared to give the discount.
Discounting doesn’t have to be the death of your profit!
Timid salesmen have skinny kids.
-Zig Ziglar
