Discount is a shield used by all spineless salespersons in B2B markets to close orders. Little do they understand that it is futile on their part to think that discounts earn them sales. We need to understand this word called “Discount” in detail in this blog from various perspectives. The reader should read this blog from the perspective of Direct Selling in B2B markets.
1. Myths about Sales Discounts
- Discounts make a customer happy enough to give you a sales order.
- Discounts can increase the saleability of a product even if it is not the best in the perception of the prospect.
- Discounts either belong to the customer or to the owner of the product. It never comes to the salesperson.
- Discounts must be given to match the price of the competitors.
- A discount is a tool to close sales orders.
- Discount is a supernormal profit that a manufacturer passes to the customer in anticipation of an order.
- It is almost impossible to sell a product without a discount in today’s market.
- Salesperson spoils his relationship with the customer when he has no discount to offer to his customers.
- Discounts, if any, must be given by increasing the price of the product in the market.
- Products which can offer more discounts sell better in the market.
2. What is the Right Discount?
- Discount is never a tool to close order. Hence there is no “Right Discount” to close an order.
- A discount is a tool to say “Thank you” to the customer after the order is principally closed. The seller has to decide the price of saying “Thank you” to the customer.
- All those salespersons who declare that they lost a given order due to their inability to give a discount are those who were not able to establish the value of their offering on the sales tale.
- Discount is not to be used as a “shield” to protect yourself from the onslaught of your customer. It is a tool to say “thank you” to the customer, as said earlier in this blog.
3. How do you handle the “Discount” question of the customer?
a) When the customer asks the salesperson “What is the discount?”, he should ask the following question in return
Is my product/service your top choice?
If the salesperson’s offering is not yet the top choice of the customer, he will not buy his product whatever discount he offers, Isn’t it?
If salespersons offering is already the top choice of the customer, why should the customer ask for any discount from the salesperson for the top product? Does it make sense?
Check out the 7 laws of Sales Negotiations to understand this concept deeply.
4. Why Do Customers ask for Discount?
- They want to try asking till they are convinced that there is nothing more to offer by the salesperson.
- They do not find the salesperson’s product “value for money” being quoted by the salesperson.
- They are comparing your product with another product which is cheaper and the customer feels similar to your product.
- The customer has misinformation about your product’s price.
- The customer wants to stagger the order closing process so that he gets more time to rethink about buying the product.
- The customer is looking for an escape route to avoid the salesperson.
- The customer wants to take a second opinion about buying the product and puts the salesperson on hold by asking for unreasonable discounts.
- Asking for more discounts is a way of saying “No” to the salesperson for many customers.
5. How to say “No” to customers when they ask for discounts?
a) Sandwich your “No” with a “Yes”. Example:
Customer: I want a 10% discount on my car servicing.
Salesperson: I will ensure that I will offer you a free car wash next time you visit our showroom.
b) Clear all ambiguities before you say “No” to a discount request from customers
Customer: I will buy your computer Model no 21GU78 only if you give me a 15% discount.
Salesperson: I am sure you have a strong reason to ask for a 15% discount. May I please clarify the guarantee terms that you are signing with the order?
c) Do not box the customer out with a “No”. Instead answer the question “How Yes?”
Customer: I want to buy the AMC on my office automation hardware for Rs 20000/- instead of Rs 29000/- quoted by you.
Salesperson: Can we look at the possibility of signing an AMC for 5 years together?
d) Explain your “No” carefully rather than saying “No”
Customer: I want the mobile free with the 10 laptops that I am buying from you.
Salesperson: I would have felt exactly similar to you while buying 10 laptops. Let me explain to you that the Laptop and Mobiles come from different manufacturers and one does not share the margins with the other.
e) Offer alternatives to the customer rather than say “No”
Customer: Please give me this refrigerator for a 15% discount if you want me to buy this product right now.
Salesperson: I will give you much more than that in the form of a dinner set, extended service to the machine and the guarantee period for the compressor.
f) Leave no stone unturned to solve the customer’s request for a discount
Customer: I have finalized to buy this flat from you but it must come with a 10% discount.
Salesperson: I promise to come with you to the interior designer and ensure that the final finish to your property is done with the consonance of your interior designer. For sure I will not charge you anything extra for this service.
In a nutshell
- Discount is a tool to say “Thank you” to the customer once the order is closed. Never use “discounts” to close orders.
- Always try to become “Top choice” of the customer whenever the latter asks for discounts.
- Learn to say “No” to the customer whenever he asks for discounts.
- Learn to handle the “discount” question from the customer
The pedigree sales professional always loves to close orders after establishing the value of the product or service rather than the price of the product or service. This is an attitude that must be practiced by all salespersons on earth.