Updated: May 21, 2020
It may be really tempting to discount your products or services when times are tough! Don't!
Every member of the front line sales team should have regular training on discounting requests and how to handle them respectfuly. (You should also be checking on the levels of staff discounting, but that is for another day)
In many small businesses a customer will get to the till or look to close on the purchase and then the "dreaded" question: - "How much for cash?
At this point embarrasment kicks in as saying no can be really hard for the individual behind the counter, and being told No can be equally so for the buyer. I have seen buyers walk out without making the purchase because they where told "No" Bluntly and in no uncertain terms.
The bluntly was not because the seller was by nature, blunt. It was a result of being challenged on the price on the ticket and as soon as the question was asked, the "Fight or Flight" response kicked in and what should have been a smooth convial transaction, suddenly became a danger that a sale would be lost if a discount was not given with two diametric emotions being fought over, to decide what to do? Not give a discount and potentialy loose a sale, or give a discount and make a loss! The net result was a blunt No!
This is where the team must spend quality time practising for these questions so they do not create an emotional fear response.
The response should be clear and natural and factual
" I don't blame you for asking, but unfortunately not. The reason being is that I cannot give the best products / level of service and aftersales support, that my customer expect, if I cannot cover my overheads.
When a business starts to cut deep into its Gross Margin, it impacts on the quality of service it can offer further down the line. Cash Flow is impacted, investment and innovation is stifled as this takes R&D cash off the table, which is needed to develop new products and services. Aftersales support costs cash too. The more discounting that is given, the less the business will be able to offer in future. When your best customer feels that their discounted price is really the normal price that everyone gets, they will be back for more discounts and the slippery slope of discounting again and the race to the bottom gathers pace.
Key is Practice Practice Practice! Don't make statements such as "We are the cheapest already", We are giving a better service than "ABC Company" as these can be challenged head on which creates emotional responses to the challenge
There are many aspects to discounting and we will look at these in more detail in future blogs, so check back. One take-away now is that your product and or service should be priced at a level that the market position expects.
A wonderful saying that should be a mantra to all business. Attributed to Benjamin Franklin:
The bitterness of poor quality remains long after the sweetness of low price is forgotten.
Poor Quality refers to any aspect, the product, the support, the service and the aftersales service.