Don’t Give Discounts

If you are looking for full-blown sales negotiation tips and hints, stop looking. You won’t find them here. There is already so much written about “how to negotiate” (feel free to Google for answers) that I thought, “Let’s not do this”. What I want to share with you is practical, bite-sized negotiation advice that you can apply immediately. There is no need to read lengthy articles or thick theory books.

The advice you will read is based on Jos Burgers‘ seminars and books. I combine these with our Buyer’s Perspective approach. Burgers is the best-selling management author in the Netherlands. Unfortunately, they are all in Dutch, but they are too good not to be shared with you, loyal thesalesadvice followers. Jos Burgers has (and still is) advised hundreds of small and medium enterprises on selling, marketing, and negotiation with great success.

Don’t Involve Others

He often starts by sharing humorous examples of what not to do. Here is one: If a customer asks you for a discount, please do not involve others. For example, when you say, “Let me ask my manager or pricing department what they can do,” what do you think you have done here? Number one, you have already devalued your price: the customer immediately thinks, “Well, the salesperson nearly wanted me to pay too much.” What does your customer expect after you speak to your manager? You cannot say, “Well, we have looked at the offered price again, and what we offer now is actually more”!

By bluntly reacting, “Let me talk to someone,” you increase their expectation of a discount, and the chance is high that when you get back, they will negotiate again.

Don’t Patronize

The other thing you don’t want to do is explain to your customer why you don’t want to give a discount. Often, salespeople react with: ” Well, you cannot compare apples with pears…” and then try to justify why that so is. Customers do not like that. It is, in a way, patronizing that they do not understand how pricing works and why you have a different price. The reciprocity principle works here, too. Do not be surprised that your customer will do the same to you, explaining why they need a discount.

Don’t give a discount without trading.

Many of you who have followed a negotiation course know this; however, it seems to be harder to do and stick to. Some salespeople cannot resist the pressure and their emotions and “push” their customers to make a decision (signing their offer) by giving a discount without the customer asking for one. In those situations, most customers will actually raise their eyebrows because your behaviour makes them feel insecure. You have been selling the value that you offer to this point, but what you are saying now is, “Actually, the value is not worth that much..it is less”.

The rule of discounting is simple: When discounting, your customer needs to give more (orders, shipments, etc.), or you will provide less (fewer features, services, etc.). Think about this: when you go back to your manager with the message that your customer is asking for a discount, be not surprised that they will react with: “And what do we get in return”?

Be kind and show empathy.

So, what should you do? Think again about the reciprocity principle. If you show empathy and are kind, the customer will react the same way back to you. Show your understanding: “Well, actually, I am not surprised that you were shocked.” Now, the customer thinks, “Hold on, you are agreeing with me.” You continue with, “Yes, it’s quite a lot of money.” And you are silent. I recommend you try this. Often, customers will justify the price themselves, in particular, if you have taken them all the way from Why Change, through Change to What and Change to Who. Revisit with your customer the risk of not changing. What are they missing out on?

Often, it is a mindset that salespeople need to get used to:

Price is not a number of Euros, but the price is a feeling

Jos Burgers

In other words, customers are prepared to pay a fair price, but they do not always know what fair is. People do not necessarily want a discount; they just do not want to pay too much. Once you can give them the feeling that your offered price is fair for the quality that you offer, often they react with: “Yes, if you put it that way, you are maybe right!”. I learned this lesson from my dad many years ago. Click here to read that story. So, be kind, show empathy and stick to your sales process.

Thanks for your tips, Jos. They are excellent and eye-openers for many.