Giving discounts isn’t necessarily a bad thing. If done strategically, discounts can encourage a sale along and actually add value for you in the long run. But many reps offer discounts early in the relationship just because the prospect asks. Michael Pici, in an article for HubSpot, warns reps that offering discounts too soon risks the following:
- Devaluing your product or service
- You immediately put price in the spotlight
- You lose bargaining power
But, if the prospect mentions discounts early in the sales process, what do you do? Luckily, Pici has some great advice. He admits that it can be challenging, noting that “you must satisfy your prospect’s expectations without destroying your profit margin.” He shares different replies you can give when confronted during different stages of the sales process, making it easy for you to satisfy the prospect and maintain your leverage.
During the first call
If asked about discounting during this stage, Pici suggests redirecting the conversation to what the prospect is looking for and needs. Ask about pain points and any specific challenges they are having and tell them that this can help you determine a more accurate discount estimate. “If the price of your product or service largely depends on the individual prospect’s needs, goals, and situation, it’s too early to discuss discounts,” Pici explains. “Without knowing the final value of the deal, you can’t determine a rate that will both satisfy them and keep you in business.” But, most importantly, make sure to acknowledge the mention of a discount in your response; you don’t want the prospect to think you are ignoring the request or blowing it off. Just explain that you’d love to talk about discounting, but need a bit more information in order to properly do so.
Another possible response is to note the discount, then ask if price will be a major obstacle for them. “There are some objections that can't be overcome,” Pici writes. “If your prospect’s request comes right after they've asked for pricing information or your prices are available online, it’s possible they don't have the budget to purchase your product at full price.” Or, he explains, they may have the budget, but are just curious about cost. This question will quickly help you determine whether you should proceed with the call or not.
To find out how to respond during other parts of the sales process, check out Pici’s entire article, where he shares nine different ways to discuss discounting. He promises “with these responses up your sleeve, you won’t dread hearing the word ‘discount' from your prospects.”