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3+1 Reasons Why Discounting Doesn't Work!

Working in sales, we have all been there: Customer asks for a discount! And now the dilemma kicks in, should we give into it, or shouldn't we... "To Discount, or Not to Discount" is the greatest question you will face, and the most commonly recurring one.

I have never hidden my position with regards to this, which is that "Discounting" is not "Selling". Either you are a professional sales person, or not. Over my years in sales, I have come to the realization that discounting is more likely to have a negative impact, rather than a positive one... and below are the reasons why:

1. You have just devalued the product or service in the eyes of the consumer. Giving away a discount, means that even you are not sold on the price of your own product or service. As a sales person you should be firm behind the value to price ratio of whatever it is your selling, and you should convey it clearly.

2. You have just destroyed all credibility and trust you have built thus far. Customer is now thinking “Why didn’t you give me this price from the start?”, “What If I hadn’t asked for it?”. They would think of you as a savvy money worshipping sales person.

3. You are preconditioning them now for future discounts. You have already done it once, so now every time they will want to do business with you, they will always ask for the discounted price. The big problem here, is that it is not just them, but also any referrals coming from them, will also be preconditioned to asking for discounts

4. Time is Money: If you are in the "services" sector, then you are trading in your time, for money. Since you won't be discounting the time you are offering, you shouldn't be discounting what you could be getting in return for your time. You need to treasure and value your time, as it is the only thing you are trading for money, so give it to the highest bidder, or the one who appreciates and understands the value of it.

There is however ONE exception to this ! Even though I am not a believer of discounts, I will give a discount (and you should too) only if you can dictate the terms of the discount. That means, giving the discount when you can ask for something in return! This is how you could do it:

  • Ask for Referrals: Give them a discount, provided they will refer you online. It costs them nothing, and they will probably do it just to get the discount

  • Ask for a lengthier contract: Ask for more months on your contract, and in return you give a discount for it.

  • Ask for a bigger order: Ask them to place a bigger order, and in return you offer some discount

Always remember... Don't discount because you are pushed into a corner. You need to be able to dictate the terms of your relationship with the potential customers. Avoid giving discounts, for the above mentioned reasons, but even if you do... make sure it is on your own terms !

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