A customer wants to buy your product, you have spent an hour hashing out details and specs; but something is unanswered. That eerie feeling when you’re about to close the deal and the hidden resistance has yet to show its head.
The customer has become hesitant all over again and you know the price is the deal breaker here. You move on to ask, “I see something is stopping you, is it the price?” Customer lets out a sort of relieved YES…
This situation has become quite normal over the past few years for most of us. In most cases we its second nature to simply say, “Eh, no worries mate, take 15% off! How does that sound?” and be done with it.
For most entrepreneurs it’s a matter of getting more users, your product out there and paying the bills.
The Right or Wrong Way.
I come from a sales background and understand two schools of thought…
- Close the deal at all costs and;
- Maintain product/ brand value
The ‘Close the deal’ side keeps it really simple. The goal is to close the deal / make the sale at all costs. Once you have hammered through all known resistances, and price is the factor, give it one last crack to add value.
If this does not work, give the discount and after almost exhausting each other, the deal seems like a sort of relieved truce / compromise.
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The other group, who hold true that discounting a product is madness (when a discount is not due). The famous line is; ‘if you discount for one customer, the next will want, and before you know it your product is selling for less than it is worth”.
Is there a wrong or right way? The answer simple answer is no.
I read an article a while back and someone spoke of the cost of web design. The customer simply could not afford it but this was translated into- if the price is a factor you have not shown the customer enough value.
Sales works on the premise that if there is a need (wants covered later) and your product can solve this need / add value, you have yourself a deal.
In the case of the no discount side, if the resistance comes up, you have not added enough value and there should be a push to show added value vs. not taking the product and remaining with the issue/ need.
But what happens when price is really an issue? This is often the case with wants. We all know that there are times when we want something, but in the end don’t buy because of price or the fact that the satisfaction gained vs. the spend does not weigh up at this point.
Would I buy to satisfy a want, even if it squeezed the budget but somehow was priced just right to what I would consider a good deal? The answer is YES.
When a Discount is a Good Idea?
Hearing the long discussions during sales training and debates on whether or not it’s worthwhile, I can say that there are good and bad times to give a discount.
The good and bad times will entirely depend on your situation. If you feel that you can afford it, it’s not going to ruin your brand reputation, and or you simply need this customer; then close the deal.
No harm in getting the job done, however; if this is the case with a large proportion of your sales then it may be trying to tell you something.
Your product may be overpriced, a hard sell, or have no market demand. Alternatively, this could also mean that your sales approach is leading toward this resistance.
Additionally, one also needs to come to terms that you cannot close them all, not all will see the benefit in your product. If you fail to add value they will not see the value. No value added, no sale.
As for those that say folk don’t have money hence the requested discount. Look at the iPhone. The price is much the same worldwide (give or take 30% either side). I have been to some pretty poor places and there are still iPhones around.
They certainly aren’t discounting every time someone walks in and asks for one.
Any thoughts, additions, or tips for the rest of us? Please share…
Image compliments of OpenClipArt.