You cannot pay school fees or buy food with a signed contract. In any case, a sale is considered closed when cash is received.

Before agreeing to that discount, find out how long the payment will take. Duration as a bargaining chip is elusive to most sellers, and the consequences can be frustrating; some even admit to feeling used. “They asked me for a 15 per cent discount, which I agreed to until their LPO (local purchase order) arrived and I realised they planned to pay after sixty days! It was a double loss. I felt cheated.”

Buyers will always look for a discount. Even you do. Whatever the reason they do so is not the point. The point is that when they do, among the issues to explore before agreeing, is how long the payment will take.

Cash is king

There is reason why that school uniform shop tells you that they’ll give you a discount if you pay in cash. And now you know why the mechanic scowled at your request for a discount, when you showed up to pay 45 days after he serviced your car. It is the same reason why some stalls would rather have an M-PESA agency than a Paybill number; and, though unethical, there are outlets that mark-up payments made via cards. Cash is king. This is a favourite expression in finance circles. It means that cash is what pays for services, products and expenses. Your salary and commissions, for instance, cannot be paid by an LPO. And you cannot pay school fees or buy food with a signed contract. In any case, a sale is considered closed when cash is received. And when cash delays, it costs to get it as it comes as a loan.

Prod discount request

So next time the buyer says, “Give us a discount” respond with “What are your payment terms?” or just plain, “How long do you take to pay?” Then tier your respond accordingly. Meaning, give discounts commensurate to what is acceptable to you. For instance, “If you are paying immediately, we will be happy to extend that discount.” Or, “Unfortunately, for that payment period we are unable to extend any discount.” This calls for strength in character as you must be firm when saying it. What if I lose the sale, or he has another service provider lined up, or (insert fear here). Well, that’s why you must be firm. Wavering will only serve to embolden the buyer to push the discount envelope further. He smells fear and the natural instinct is to ‘attack’.

Of course, the ideal situation is to establish the buyer’s payment terms well before the issue arises. During the pitching phase, unearthing how long they take to pay enables you to be prepared for (even pre-empt) the issue. During the interview stage try asking, “What are some of the challenges you have with customers?” Delayed payment is likely one such and allows you to flow into, “What about you? What are your payment terms like?”

So, there you have it. Exercise caution with discounts. As the opening says, “Before agreeing to that discount,…”

If you would like to have your sales team sell more, we can help. In order for us to do so we propose a free consultation meeting or a call. If in agreement please complete the form below and we will get in touch after receiving your details, none of which will be public. Thank you.

Views – 436

About Author

Related posts

To master the art of negotiating, ask this one question

Why should they agree? This is question you must ask yourself, and adequately respond to, if you are to master the art of effective negotiating in Sales. Why should the buyer agree to buy what you are selling? Effective negotiating means unlocking success through skilful communication. In the dynamic world of sales, mastering the art

Read More
Stay ahead in a rapidly changing world with Lend Me Your Ears. It’s Free! Most sales newsletters offer tips on “What” to do. But, rarely do they provide insight on exactly “How” to do it. Without the “How” newsletters are a waste of time.