PayMeInSteak
What’s the best ways to avoid discounting as a sales strategy?
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Do not offer a discount - its really simple actually - they will ask and you will say, this is the market rate for our product and the rate that we provide to all of our customers to avoid situations where people think they need to negotiate for the best price. And they will respect you for it.
Agree. Never offered discounts. I know that it's not for everyone because some folks want to do it to offer a time-based incentive to get it in by EOM, EOQ, whatever. However, a lot of the time I've notice if they would've waited a few days, the customer would've paid full price. It also creates an issue come renewal time, when technically you most likely want to charge a new, higher price based on headcount, development, etc.
However, I think they only time that it does make sense is in instance where you're trying to get a multi-year deal. Even then, I wouldn't lead with it. The customer may never even ask for a discount. By offering it, you've cut yourself out of commission and devalued the product or service you sell.
Finally, I also like to put myself in their shoes...would that customer that you're selling offer a discount on the product they sell without being asked (more often than not, I'd say no)?
However, I think they only time that it does make sense is in instance where you're trying to get a multi-year deal. Even then, I wouldn't lead with it. The customer may never even ask for a discount. By offering it, you've cut yourself out of commission and devalued the product or service you sell.
Finally, I also like to put myself in their shoes...would that customer that you're selling offer a discount on the product they sell without being asked (more often than not, I'd say no)?
Do better discovery. The better alignment you have to a problem, and the bigger the problem they need to solve, the more you can charge. And stop discounting just to get it in EOQ.
I always start with list price as well, anchor high.
I have a list of "gives" payment terms, preferential start dates, etc that are non-monetary, I normally use those first if needed.
I always start with list price as well, anchor high.
I have a list of "gives" payment terms, preferential start dates, etc that are non-monetary, I normally use those first if needed.
Realizing your product provides tremendous value and doesn’t warrant discounting.
What @BigMeech said, better discovery. I'm not in a closing role currently, however when I was an AM, if I didn't do enough discovery, I didn't find enough pain and I wasn't able to provide enough value and they would alway ask for a discount. If you can deeply understand their needs and solve for their pain points that make them bleed money, the cost to fix their issues will be worth it.
I once had an AE who refused to run company wide promos because he believed in our product way too much to discount it - dude went to prez club every year and rarely lost a deal because he would not discount.
I once had an AE who refused to run company wide promos because he believed in our product way too much to discount it - dude went to prez club every year and rarely lost a deal because he would not discount.
I don’t consider discounting a sales strategy a lot of times. There’s tons of factors but the main ones are
1.) client expectations
2.) competitors in the market
3.) urgency and need of the deal.
often times the discount is needed to push the paperwork through faster or because the market is saturated and the budget has come to that so it is needed. Obviously you don’t want to have to do it but if you aren’t a super established vendor with a unique product(not truly offered by someone else) it’s usually justified. But the buyer needs to give the number they want to be discounted to not the other way around if you offering
1.) client expectations
2.) competitors in the market
3.) urgency and need of the deal.
often times the discount is needed to push the paperwork through faster or because the market is saturated and the budget has come to that so it is needed. Obviously you don’t want to have to do it but if you aren’t a super established vendor with a unique product(not truly offered by someone else) it’s usually justified. But the buyer needs to give the number they want to be discounted to not the other way around if you offering
Listen, ask good questions and research!
Example: If it was all about price the whole world would ship with USPS... but they don’t. Why? Service is non existent. Enter UPS and FedEx. More expensive but more reliable.
Example: If it was all about price the whole world would ship with USPS... but they don’t. Why? Service is non existent. Enter UPS and FedEx. More expensive but more reliable.
I would argue that it's a tactic rather than a strategy anyway. If you're trying to get deals closed with some sort of incentive, there are usually things you can do. Examples include price caps on renewal, the option to renew at the same price, discounts on future modules, the ability to choose their project manager, etc.
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