What to do When Your Customer Asks for a Discount
You’ve done your research and determined what your pricing will be for the upcoming year. You know your overhead costs, the actual value of the product or service you provide as well as the value that your customers attach to that product or service. And you’ve evaluated your competitors to ensure you are positioned appropriately in the industry.
It’s time to start selling. And this is where negotiating and clients asking for discounts can come into play. No matter how good your product or service is, or your reputation, there is always someone looking for a lower price.
So what do you do when your customer asks for a discount?
Train Your Staff
The last thing your customer wants to hear is that your employee lacks the power to give a discount. They will simply ask to speak to a Manager. Train your employees on how to deal with these requests. Provide them with parameters so they can be flexible with price and bundling products together. But remember, most people are uncomfortable asking for a discount, so don’t make it easy for them.
There are many reasons why people ask for discounts. Maybe they want to save money, or have seen a lower price somewhere else. Train your sales team to ask WHY the customer wants a discount. If they say that it is expensive, ask them what company they are comparing you to. This gives you the opportunity to explain what makes your company stand out from the competition and how working with your company is worth more to them than the competition.
Add or Remove Products or Services to Equal the Discount
Depending on your customer, try one of the following two strategies.
Add Value – For example, if a service costs $1,500 and the customer asks for a discount of $250, add another service valued at $250 while keeping the price at $1,500.Remove Value – For example, if a service costs $1,500 and the customer asks for a discount of $250, remove a service of that value in order to lower the price to $1,250.
It will be up to your sales team to determine which offer to present to the client.
Know Your Worth
You are not required to offer your customers a discount. If you have priced your product or service to reflect its value, stand behind those prices with confidence. You may lose a sale by not giving a customer exactly what they want, but that is OK. Customers who appreciate your business will agree to buy at your original price.