Don’t be too quick to acquiesce to requests for discounts

Doing so makes you an order taker; you are little more than a shopkeeper waiting for the buyer to say, “I want a loaf of bread,” for you to jump into action.

If you acquiesce to discounts based solely on your salespeople’s feedback, then you and your sales people have a problem; you, a business one, and your sellers, a skills one. For instance, “This (new) solar panel from China,” the sixth seller animatedly complains holding up a competitor’s brochure, “costs less than three times ours. The customer says we are overpriced and should match the (competitor’s) price. This is why we are struggling to sell our panels.” And yielding to pressure the institution acquiesces to the point where dishing out discounts becomes a culture.

And yet it knows the new panel barely holds an efficiency candle to its trusted, tried and tested one!  Such an institution does not have sales people, it has order takers; they are little more than shopkeepers waiting for the buyer to say, “I want a loaf of bread,” for them to jump into action.  Such an institution stunts the capacity for its salespeople to grow.  

Strategic price reduction

Just to be clear, this is not about addressing the price problem because it has become of strategic importance. For instance, banks with capping of interest rates; or, a globally renowned smartphone company, flooding the market with cheap imports bearing a different brand so as to stave off competition. No. This is about acquiescing to price discounts as a matter of operational course. That is, day to day selling. In such instances, when the institution reduces the price, do you suppose the sellers suddenly get a second wind? Yes, they do. All for a fleeting moment before the next, “Our prices are too high” bell rings again.

Differing points of competing

You see, the competitor is selling low price. You are selling product superiority, efficient processes, reliable distribution and supportive staff. The problem is your salespeople don’t sell this, and so have never grown that muscle. They assume the buyer knows; after all, your aggressive marketing should have worked.  Such salespeople need to learn how to articulate their, and their product’s, value.

Try this. Respond to the price discount request with, “It’s good to know you are familiar with Brand X.” (And don’t mention it again). “Our point of difference is that our durable panel will enable you surpass the cost savings you seek because of its durability. May I show you how?”  If the buyer is competing on price even after articulating the comprehensive nature of your offering and how it suits him, then he has chosen to remain tactical. You do too, by changing the package for every discount sought. So, “With that discount we are unable to deliver the panel to you (or, provide our expert after sales support, or we will have to remove this component).” 

Very likely the buyer will not agree to these changes but to your original price. Many times, buyers push the discount envelope for lack of understanding, or because they can. It is the seller’s responsibility to discern either, and address it appropriately.

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