How often have you heard this – “Look, we really love your product, but it’s outside of our price range. Can you offer any discount?”
Offering discounts can be a great way to speed up a slow-moving deal. But if you’re adjusting price before negotiations begin, you’re doing a serious disservice, both to yourself and to your product.
Instead of caving right away, there are four tried-and-true responses you can give to turn the conversation around in your favor.
What’s Wrong with Discounting Immediately
What’s wrong with discounting immediately. Like I said, discounting isn’t always a bad thing. It can speed up deals and give you leverage for reducing the service you’re offering.
But there are three very real problems to offering a discount before negotiation has taken place.
#1. Devalue
First, your buyer subconsciously devalues your service. After all, if you’re really going to deliver the ROI your pitching, why do you have to immediately discount the price?
#2. Forfeit’s Power
Second, the instant you propose a discount, you lose some of your negotiation power. You lose this negotiation power as you’ve taken the price, your biggest variable for negotiation, off the table.
#3. Shifts the Focus
And third, discounting shifts the focus. In the buyer’s mind, you’ve shifted the conversation from the value that is being exchanged to the emotional topic of money. Rather than the buyer thinking about the impact that your service is going to have on their business, they’re now thinking about what is going to cost them in the opportunities they will lose from this lack of cash flow.
So with those three things in mind, it’s important that negotiations on price and discounting happen towards the end of the sales process rather than at the beginning of it.
That being said, if a buyer does request a discount too early in the process, there are a few things you can do. And that brings us to the four word-for-word responses that’ll deflect, turn the tables, and even give you the selling advantage.
1. The Value Probe
The first and easiest way to deal with a buyer bringing up the idea of a discount is to say this word-for-word:
“We can definitely have a conversation about the numbers. But first let’s make sure that we’re on the same page about our service being a good fit for your needs…”
So, what does this response do?
It Reframes the Conversation
You buy yourself time to reframe the conversation. Right now the buyer is focused on price alone. But at this point in the sales process, you need to be demonstrating value. What do you offer that your competition doesn’t? And most importantly, how does it solve your buyer’s problem? This is the perfect time to focus on that instead of the expense.
It Let’s You BUILD on Your Value
It also gives you more time to build value before the numbers do eventually get discussed. What additional benefits do you offer that you haven’t talked about yet? What value can you bring to the table that the buyer isn’t already aware of?
2. The Obstacle Identifier
The second way to deal with your buyers asking for discounts is to answer your buyer’s question with a question.
When your buyer asks if you’re able to discount you can ask:
“That is a fair question. Do you see price being a major obstacle in this conversation?”
This immediately makes the buyer reconsider if they really want to discount or if they want to get the deal done. It also pushes the pressure back on the buyer to justify why there should be a discount in the first place.
Bonus tip here. Notice show I said “that’s a fair question” before I responded with my question? The point of this extra step is to acknowledge to the buyer that I have heard them, but I need more information to answer their first question.
This little extra ping stops the question coming across as manipulative and lets the buyer feel in control. Which of course is a great way to keep the relationship on solid footing.
3. “Why?”
Are you feeling brave? Well when the buyer asks you about discounts, you can politely respond with the question:
“Why?”
Now admittedly, this does take some guts. Your buyer definitely won’t be expecting it. And taken the wrong way, it could spark some defensiveness. That’s why you’ve got to be polite when you say it and genuinely look for an answer from the buyer.
A slight look of confusion helps sell this too. The point is you need to look sincere. Like nobody else has ever asked you this before, rather than aggressively asking them “WHY?!”.
Responding with this question of “why?” when a buyer asks for a discount, stops the buyer from negotiating on price just for the sake of negotiating.
In my experience buyers often respond to this “why” question by saying “I was just wondering…” which you can then shrug off and carry on with the sales conversation.
4. The Tit-for-Tat
The Tit-for-Tat. This is in my opinion the cleverest approach. Because with the right wording, both you and the buyer will leave the conversation with added value.
Here’s how you do it.
When somebody asks for a discount, say something along the lines of this:
“I can reduce the costs if we [extend the contract/change the tier of service/get a referral/etc.].”
This turns a concession in randomly discounting your pricing into an active negotiation. Okay, you can offer a little give on price. But what will YOU get out of things?
Now this isn’t something you want to deploy with every buyer. Because truth be told, you can shut down the discount request with most leads using the three previous responses without giving anything up.
But if you’re dealing with a tough customer where price is obviously a major pain point, this response could be your ticket to a winning sale.
See, it’s always a good idea to walk into your sales meeting with what’s called a BATNA:
- Best
- Alternative
- To
- Negotiated
- Agreement
A BATNA means if plan A doesn’t work because it’s too expensive, you’ve got a plan B that you can offer the buyer to make sure that you don’t leave empty-handed.
Often you will find the buyer wants the extras you are offering with plan A and so when you explain you can only discount if you move them to plan B, they will fall in line with the original pricing.
See how that works?
With a bit of wordsmithing and gentle nudging, you can either shut down their discount request or move them to a higher-value sale.
Win-win.
