In any negotiation, a client/customer/buyer will most likely ask for a discount.
Discounting your product/service should be your last option in selling.
You may think a 10% discount is no big deal, it’s just, well...10%. There are three problems with this line of thinking:
1) Depending on your cost structure, a 10% can impact the bottom line by 20%-30%.
2) a 10% discount means you have to find more business to make up for that 10%.
3) Discounting is equivalent to ‘gifting value’. The late great Mack Hanan, the father of Consultative Selling said it best, “Discounting is the ignorance tax you pay for not knowing the value of your product.”
So, here are 7 Discount Countermeasures you can use to avoid gifting value.
Countermeasure 1: Offer 3 options (Good, Better, Best) in a proposal or offer. If the client says, “Can I get a discount?” Just shift down to the next lowest option.
But wait, what if I offered Good and they still want a discount? Keep reading.
Countermeasure 2: Remove Item - If possible, remove a line item from the offer. You say, “Mr. Buyer, I can’t discount this but, let’s go ahead and remove an item in the proposal to bring the price within your budget. Which item do you propose we remove?” (Note: Let the buyer do the removing)
Countermeasure 3: Sell Used Unit - When I sold technology equipment, and a client asked for a discount, I’d say, “I can’t discount the product, but I do have a used one that is as good as new and still has the warranty. Will that work?”
(Note: I didn’t say ‘no’, just offered an alternative.)
Countermeasure 4: Offer a Substitute - Similar to a used product, maybe you could offer a product that is similar in features. For example, you can sell a product that has limited features but has 80-90% of what the buyer needs.
Countermeasure 5: Offer a free service - Now, I use the word ‘free’ loosely here; nothing is actually free. That said, I do a lot of public speaking and I have clients who ask me for discounts. I respond by saying, “I’ll tell you what. I have a Sales (Velocity) Academy that costs $500/year/user. I’ll include 20 licenses for your sales team. That’s a $10,000 value. How’s that sound?” It doesn’t cost me anything to add 20 people. Win-Win.
Countermeasure 6: Offer a loss leader - A loss leader is a product that isn’t selling well; sunk cost. Sometimes you just want to get rid of the product out of inventory. “Mr. Buyer, I can’t give you a discount, but I will throw in an X unit which has a $7,500 value.”
Countermeasure 7: Extended Payment Plans - Sometimes just simply changing the financial plan from let’s say Net 30 to Net 90 days is enough to assuage any discount request.
Now, I know what you’re thinking what if they insist on a discount? Then, it’s time for the 'Nuclear Option' of discounting countermeasures.
Quid Pro Quo - When someone asks you for a concession then you need to ask for something in return (quid pro quo). For example, “I can give you a 10% discount but I need you to sign on for 2 years vs. 1 year. Can you do that?” Or, “I can give you a discount but you’ll have to double the size of the order. Sound fair?”
Remember, giving a discount is tantamount to pricing treason. Do your best to protect your pricing!
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