How often do your buyers ask you for a discount? Probably too often right?
Discounting isn’t always a bad thing. A discount can help accelerate a slow-moving deal. Discounts can also give you leverage for reducing the service that your offering as well.
But what most salespeople get it wrong is that they offer discounts before a negotiation has really started.
This can be devastating to your chances of crushing your sales quota.
So in this post I’m going to explain why discounting upfront can sabotage the chances getting deals done and four ways in which you can respond when a prospect when they ask you for discounts.
DON’T DISCOUNT IMMEDIATELY
Now, when you promise a prospect a discount before a negotiation has taken place, there are three problems that arise –
- Your buyer subconsciously devalues your service. After all, if you’re really going to deliver the ROI your pitching, why do you have to immediately discount the price?
- The instant you propose a discount, you lose some of your negotiation power. You lose this negotiation power as you’ve taken the price, your biggest variable for negotiation, off the table.
- And finally, in the buyer’s mind, you have shifted the conversation from the value that is being exchanged, to the emotional topic of money. Rather than the buyer thinking about the impact that your service is going to have on their business, they now thinking about what is going to cost them in the opportunities they will lose from this lack of cash flow.
So with those three things in mind, it’s important that negotiations on price and discounting happen towards the end of the sales process rather than at the beginning of it.
But Will… What happens if a buyer calls me up and demands a discount out of the blue?
Well there are four ways that you can deflect this discount question and turn it to your advantage –
#1 SAME PAGE…
The first way to deal with a buyer bringing up the idea of a discount is to say:
“We can definitely have a conversation about the numbers, but let’s make sure that were on the same page about our service being a good fit for your needs first…”
By responding to the discount question with this statement, you buy yourself time to re-frame the conversation back to the value that your providing. It also gives you more time to build value before the numbers do eventually get discussed.
The second way to deal with your buyers asking for discounts is to answer your buyer’s question with a question. When your buyer asks if you’re able to discount you can ask:
“That is fair question. Do you see price being a major obstacle in this conversation?”
This immediately makes the buyer reconsider if they really want to discount or if they want to get the deal done. It also pushes the pressure back on the buyer to justify why there should be a discount given.
Bonus tip here. Notice show I said “that’s a fair question” before I respond with my question? The point of this extra step is to acknowledge to the buyer that I have heard them, but I need more information to answer their first question.
This little extra ping stops this coming across as manipulative and lets the buyer feel in control.
Are you feeling brave? Well when the buyer asks you about discounts you can politely respond with the question:
Now this does take some balls. You need to be polite when you say it and genuinely look for a sincere answer from the buyer.
A slight look of confusion as if someone has accused you of farting when you didn’t helps sell this too.
The goal is to look like nobody else has ever asked you this before, rather than aggressively asking them “WHY?!”.
Responding with this question of “why?” when a buyer asks for a discount, stops the buyer when they’re trying to negotiate with you for the sake of it.
In my experience buyers often respond to this “why” question by saying “I was just wondering…” which you can then shrug off and carry on with the sales conversation.
#4 EXCHANGE VALUE
Finally, the best approach when somebody asks for discount is often to say something along the lines of:
“I can reduce the costs if we [extend the contract/change the tier of service/get a referral/etc]”
This turns a concession in randomly discounting your pricing into an active negotiation.
It is a clever idea to walk into your sales meeting with what’s called a BATNA or best alternative to a negotiated agreement if you think you’re going to use this line.
A BATNA means – if plan A doesn’t work because it’s too expensive, having a plan B that you can offer the buyer to make sure that you don’t leave empty-handed.
Often you will find the buyer wants the extras you are offering with plan A and so when you explain you can only discount if you move them to plan B, they will fall in line with the original pricing.