We've all experienced this at some point, so how can you avoid the dreaded discount request?
No matter what products or services you sell, all companies will come across customers asking for discount requests. As a sales representative, if you come across a customer asking for a discount your job is to still close these sales while keeping the customer happy but also making sure you are not putting any strain on your company’s finances. To make sure you are prepared for these discount requests we have put together a few effective responses to help avoid giving out a discount.
The first and we believe the most important way to avoid a discount request from your customer, is to have a well-defined value management practice in place that combines collaboratively discussing and showing your customer how your products or services offer more value than other solutions on the market. Many discount requests come from customers finding the same product (or what they think is the same product) at a cheaper price elsewhere, so it is important to explain as well quantify how your product provides more value to them. Research has shown that by starting discussions about the value your products or services offer right at the beginning of the sales cycle you can reduce or completely avoid the discount discussion all together. This is one of the many benefits that users of the Shark Value Management platform have reported to us!
If discount requests are still cropping up, speak to your customer; ask them exactly why price is an issue to them. This ensures that you do not undervalue your product and shows your customer that your product or service is worth the price advertised. This also helps to move the sales process on further as it helps to address any issues the customer may have with the product or service meaning the salesperson can address and resolve this at the beginning of the sale.
Another way you can avoid a discount is to add on more value to the product or service than they were originally getting. One way you could do this is to add in an extra item or service that they weren’t getting before to make pricing look more attractive, or even give them a free month subscription if they purchase a certain number of months in advance. Another option is to agree to a discount but change the terms of agreement. For example, you can offer a discount but make the contract longer or change the scope of the order. This is important to implement to ensure you do not financially lose out.
As well as knowing ways to avoid discount requests it is also important to know what not to do in this situation. Make sure that you don’t let your salespeople default to offering discounts as this can really damage your company’s reputation surrounding the value of your products as well as affecting your profits. It is best to only give discounts at the correct time, for example when you are just about to lose a sale completely.
You also should stop competing with other companies on your pricing. There is no point attempting to provide the cheapest product or service as there will always be someone who will beat you on price. This approach can also put customers off from purchasing from you, as most look for the products that bring the most value rather than just the cheapest option.
If you would like more information about how Shark Finesse can help you avoid discount requests, get in touch with our team today.
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