More than 25% of sellers say that overcoming objections is their top challenge. Additionally, the top objections they hear involve cost. These stats, from SalesFuel’s Voice of the Sales Rep study, reveal just how much of a roadblock pricing can be in sales. Specifically, the top objections are:
- The price is too high.
- They don’t have the budget.
- They can get it cheaper online.
It’s no surprise that the ability to counter requests for discounts is a valuable skill. While there are times when offering a discount can push things to a close, it shouldn’t be happening too early in the sales process. And it definitely should be a last resort.
Why should you counter requests for discounts?
While it’s certainly tempting to adjust pricing, sellers need to understand the negative impact that it can have on their business and brand. The team at Sales Xceleration compiled a few reasons why resorting immediately to discounting can be damaging.
First, doing so can devalue your solution. As they point out, “An old adage says an item is only worth as much as someone is willing to pay. So, if the price is lower than your claimed value, the actual value can really only match the price paid. And this new belief system can put you in a bad position for future business.”
You’ve likely spent time promoting your solution and its value to the prospect. But if you immediately drop the price when they first ask, that value you’ve built up doesn’t hold as much weight anymore. It can be hard to rebuild that concept of high value when you’ve dented it so quickly. And while discounting may win you this deal, what about future ones? As Sales Xceleration points out, “Discounting sets a bad precedent that undermines your future opportunities to maximize margin.”
It erodes trust and confidence
Another reason not to give in to requests for discounts is that it can nail your confidence. When you lower a price, it can seem like what you’re selling really isn’t worth its original price. You essentially are undermining your own value proposition. And how do you think this looks from the prospect’s perspective? Their trust in you and your credibility also take a hit in their eyes. “Prospects sense this lack of confidence and question two things: 1) Is this solution as good as I thought if they are willing to accept less? and 2) Can I really trust this person who wants me to buy it?”, they explain.
You’ve spent so much time selling the value of your solution; suddenly, you’re ready to devalue it to close a sale. It’s pretty easy to understand why this can break down trust.
It shifts the focus and the power
Once you’ve agreed to a request for a discount, you’re now focused on money rather than value. As the professionals at Salesman.com write, “In the buyer’s mind, you’ve shifted the conversation from the value that is being exchanged to the emotional topic of money.” And it may be too late to pivot back to value-based selling techniques.
You have also shifted the power in the negotiation from yourself to the buyer. By offering concessions, especially on something as big as price, the buyer now wields more control and likely knows it. This can have a big impact on your future relationship.
While sellers should never say never to requests for discounts, it can become all too easy to resort to lowering prices to close deals. While it may mean a win this time, doing so can be damaging.
For tips on how to deal with price objections, check out SalesFuel’s advice for demonstrating value and ROI, facing cost objections, and dealing with price negotiations.
Photo by Anna Shvets