If your company had to sell its products and services at a set price, would your people sell differently? I often ask this question and unfortunately, the most common answer is ... yes!
If this is the case, why does the traditional sales rep get caught in the discounting trap more than he or she should?
The answers are clear and directly impact the bottom line of an organization. It’s easier to discount than to ask 6-8 more tough questions. Pricing conversations are hard. It takes conviction and steel in the spine to stand up for what it is worth vs. what people perceive it to be worth. Maybe pipelines are thin. Maybe they have invested a lot of time, effort and company resources into an opportunity and they feel it is better to discount than losing the entire opportunity. Does the sales rep truly believe it is worth it?
Let's keep in mind a few key rules:
- Price is never the real issue. Too often discounts are not addressing the root issue from a potential client. Does the client believe it is “too expensive” (shame on salesperson) or do they not “have the available funds” (budget issue)?
- Discounts must be earned. Too many times sales reps have conditioned people when to buy. The prospect knows if they wait until the end of the month or quarter sales reps may be desperate enough to discount their prices to win the sale. Desperation equals discount.
- If you want to know the future, bring it back to the present. I’ve encountered thousands of sales professionals who offer a discount to close the sale, however, one of the fundamental technical problems they failed to understand is what would happen IF they were indeed able to provide a reasonable discount.
Are your products/services so repulsive that it requires a discount for people to buy? If your answer is no, what are you going to do to help your people hold firm on price?