DO NOT DISCOUNT!

“With confidence,
you've won even before you start.”

from Self Confidence by Khalid Moustafa

Those that have worked with me have heard this statement a few times…

DO NOT DISCOUNT!

Discounting, or giving a product away for free, reduces its’ value in the eyes of your customers. And that is terrible news mid- and long-term. And in many cases even worse, it is meaningless for the short-term: A client, unwilling to make a commitment for $100, is often not all of a sudden going to make it for $50. 

And even if you are successful in closing a deal by offering a discount, the psychology that is at work when you do has detrimental effects: 

1.     Lack of Confidence:  You are saying that you don’t believe enough in what you’re selling that you think you can sell it for the standard price. As soon as you offer a discount, your prospect immediately loses confidence in you and sees that you don’t stand behind what you’re trying, wholeheartedly, to sell to them.

2.     Show of Weakness: You’re showing your cards and proving that you have a weak hand. Offering the first discount enters you into a downward spiral. Now that the client sees your weakness, they will ask for more and more concessions.

3.     Bad Precedent: When you offer a discount, whether it’s the first or the fifth engagement, there’s no going back. As soon as you lower your price, your customers will expect to see the same thing next time. Or, they’ll hold out until you offer another “special”. And most likely, they won’t purchase without it. Don’t fall for the trap of “one-time discount” or “introductory price.” You will be stuck with it forever.

4.     Lowering the Perceived Value: Buyers buy based on the value they perceive. You haven’t done your job as a salesperson if you haven't demonstrated to your prospect that what you're selling can genuinely add value. If you go in with a discount in hand, you're trashing that value and throwing it out the window. 

5.     Becoming Untrustworthy: While your prospect might be thrilled to get a lower price, in the back of their mind, they're also saying, "Wait, but they already told me this is the very best they could do and now they're offering me a discount? What else haven't they been honest about?" You're stirring up questions that should never be there in the first place.

6.     Conversation on Price Only: The last thing you want in sales is to have the conversation focused on price. And that’s just what happens when you offer a discount. When the conversation is focused on price, it doesn’t give you room to talk about the other important things, like your prospects' needs, business challenges, and how your company is offering the ideal solution that will make their lives more painless. All of this obviously does not apply when you intend to sell based on pricing only, e.g., intentionally undercutting all competitors to buy market share.

There are ways to offer a “discount” without actually offering a “discount." But with everything said so far, why would you offer this? Because it does allow a salesperson to demonstrate flexibility on pricing without the detrimental effects of discounting. 

Ideally, the salesperson will be able to convince the customer that the price offered is a fair reflection of the value the product/service delivers. However, there are many situations in B2B selling where the need for compromise, optics, psychology, semantics, or gamification requires a change to the pricing offered initially (while continuing to avoid the use of the word discount).

Here are a few examples of how to accomplish this:

1.     Lower the price in conjunction with changing or reducing the product or service – “The price will be x if we include y in the agreement”

2.     Reduce the length of the contract – "The price will be x if we make this a y month agreement." 

3.     Use a payment schedule or subscription to show small numbers or undercut a necessary threshold – "With monthly invoicing, your payment will be x."

4.     Obtain a larger or longer commitment in return for a price adjustment – “If we sign an x year agreement, your annual price will be y."

5.     Defer a part of your product/service – “since x is not required before y we will deliver and invoice it on y." 

Generally, in your approach, use these steps: 

• Start by deliberately choosing your language and avoiding words like discount, reduction, best price, etc.;

• then use positive, factual, clear language that always connects back to the value your product/service provides;

• and if you are making a change to what you initially offered, always ask for something in return.

Just remember: DO NOT DISCOUNT.

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Alyssa Rimmer – 6 Reasons Why Discounting is Destroying Your Sales (And What to do Instead)