A short sales-advice video (speaker: Henning Schwinum) warning against discounting. The speaker gives six numbered reasons why offering discounts undermines perceived value, weakens negotiation position, creates lasting price expectations, and shifts focus to price rather than value. The video closes with recommended alternatives to nominal discounts (trade-offs, contract changes, payment schedules, deferred delivery, or securing concessions in return).
Chapters
Those that have worked with me have heard me say this over and over again. Do not discount. Discounting reduces the value of the product in the eyes of your customer, and that is terrible news, especially mid and long term. And in many cases even worse, it is meaningless in the short term. A client unwilling to make a commitment for $100 is often not all of a sudden going to make it for 50 bucks. And even if you are successful in closing a deal by offering a discount, the psychology that is at work when you do has detrimental effects. Here are six of 1. When discounting, you are saying that you don't believe enough in what you're selling that you think you can sell it for the standard price. As soon as you offer a discount, your prospect immediately loses confidence in you and sees that you don't stand behind what you're trying wholeheartedly to sell him. 2. When discounting, you're showing your carts and you're proving that you have a weak hand. Offering the first discount enters you in a downward spiral. Now that the client sees your weakness, they will ask for more and more concessions. Number three when you offer a discount, there's no going back. As soon as you lower your price, your customer will expect to see the same thing next time. Or they'll hold out until you offer another special. And most likely they won't purchase without it. Don't fall for the trap of one time discount or introductory price. You will be stuck with it forever. 4. Buyers buy based on the value they perceived. You haven't done your job as a salesperson. If you haven't demonstrated to your prospect that what you're selling can genuinely add value, if you go in with a discount in hand, you're trashing that value and throwing it out the window. Number five While your prospect might be thrilled to get a lower price, in the back of their mind they're also saying wait, but they already told me that this is the very best they could do and now they're offering me a discount. What else haven't they told me? What else haven't they been honest about? You're stirring up questions that should never be there in the first place. And number six and final. The last thing you want in sales is to have a conversation focused on price. And that's just what happens when you offer a discount. When the conversation is focused on price, it doesn't give you room to talk about all the other important things like their needs, the challenges or or your solution. Now, there are ways to offer a discount without actually offering a discount. Ideally, the salesperson will be able to convince the customer that the price offered is a fair reflection of the value the product or service delivers. However, there are many situations in B2B selling with the need for compromise, the need for optics, psychology, semantics, or gamification. Require a change to the price offered initially. If you're making a change to the price, always ask for something in return. For example, lower the price in conjunction with changing or reducing the product or service. Do it together with a reduction of the length of the contract. Use a payment schedule or subscription model to show small numbers, or undercut a necessary threshold, or obtain a larger or longer commitment in return for a price adjustment. Or simply defer part of your product or service to later. And then always remember, do not discount.
