Discount requests are a common part of selling, as many buyers will have no issues with asking for a cut in price before purchasing. SalesFuel’s own Voice of the Sales Rep study reports that a too-​high price is one of the top objections reps receive. Typically, salespeople expect to negotiate on price because, as HubSpot’s Michael Pici writes, “A discount can help accelerate a slow-​moving deal, create goodwill, and give you leverage for requesting concessions.” The important factor, though, is the timing of when you agree to negotiate. 

The key to successfully negotiating discount requests is timing, Pici explains in a recent article. If you promise to cut pricing too soon in the sales process, you run some risk. Immediately agreeing to a price cut the first time a prospect asks can result in the following:

• The buyer gets the impression that your product or service doesn’t hold as much value. If you quickly agree to lowering costs, it’s logical for a prospect to suspect the ROI wouldn’t be as promised.
• Supporting the shift of focus solely to price. “Instead of talking and thinking about your product’s potential impact on their business, the prospect is thinking about how much it costs,” Pici writes. If you immediately concede and start price negotiating, you’re supporting that focus shift to cost. 
• You immediately lose bargaining power. As Pici points out, successful negotiation involves give-and-take.

Discount requests: When and how to negotiate 

The beginning stages of the sales process is not the time to negotiate cutting prices. Discounting too early is a mistake often made by reps, and though he acknowledges it’s tricky, Pici believes that there are easy and effective ways to avoid this mistake. He writes, “Of course, responding to discount inquiries during the actual negotiation is challenging too. You must satisfy your prospect’s expectations without destroying your profit margin.”

He goes on to share examples of replies you can use when a prospect makes a discount request at various stages of the sales process. 

Discount requests during the connect call

One response he suggests is to acknowledge that while you are the correct person to ask in regard to a discount, you first need to uncover what exactly the prospect is seeking. “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. You must first find out the value of the deal, and only then can you determine a price that will benefit you both. He also cautions against not acknowledging the request; it can make it seem that you aren’t listening or valuing what the prospect has to say. By noting their discount request, it assures them that you care about what they’re saying and are not only seeking to push your own agenda.

You can also ask if price would be the biggest obstacle to buying. Honestly, there will be objections that won't be able to be overcome (Voice of the Sales Rep revealed 30% of reps say that not having enough budget is a common objection they hear). If you get a discount request early in the sales process, there’s a chance that price is just too high for them and before they can proceed, they need to know if there’s any room for negotiation. “…It’s possible they don't have the budget to purchase your product at full price,” he explains. “They're trying to learn whether you’ll consider a discount. Say no, and they’ll likely walk away. Alternatively, they might be capable of paying the normal rate — but interested in getting a discount if they can.” By outright asking if price would be the biggest challenge to buying when they object, you’re immediately finding out which of these is true before the process goes any further. Unfortunately, you may find that if your price is just too high, you’ll have to disqualify them.

During the sales presentation or demonstration

If, when you’re presenting or demonstrating, the prospect throws out a discount request, don’t jump to agree just yet. Because they’ve agreed to a presentation or demonstration, you already know that there is some interest in purchasing and a willingness to buy. Don’t be too fast to discount, though. “Automatically granting their request will make you seem overly eager to close, which will work against you during the actual negotiation,” Pici writes. “It may also lead your prospect to wonder if they’ve misjudged your product’s value.”

During negotiations 

Sometimes, a buyer will just want to haggle over price. Pici suggests a simple yet effective one-​word response: “Why?” Simply asking why the prospect wants a discount can be a surprisingly simple way to find out how to proceed. There may not even be a real reason for the discount request, and they say that they were just wondering. Or, the buyer does have a reason that you can counter, thus streamlining the sale. You may even consider discounting depending on the case. This question at least opens up a dialogue to learn about an issue with their budget or other potential roadblock. 

Another option is to ask something like, “What would need to happen to make our offering worth the price I quoted you?" Even though you are deeper into the sales process, you still don’t want to instantly discount at the beginning of negotiations. Asking a question like this when faced with a discount request potentially highlights just where you failed to sell them. “You can uncover gaps in the case you've made and identify objections that might still exist,” Pici writes. “It allows you to add or argue value for your offering and — if you meet the needs outlined by your prospect, to earn full price.”

These are just a few examples from Pici’s article, and they can really help you respond appropriately to discount requests, especially when they’re made at the very beginning of the sales process. Whether during the discovery call or negotiations, his suggestions can help you satisfy prospects and safeguard your profits.