Have you ever been asked for a discount during a sales meeting and not known how to handle it without offending the client and without your business or service losing the value it has?
It's important that you know how to identify your potential clients' motivations when they ask you for a discount. In some cases, you may be able to make a concession, but in others you'll need to recognize whether granting that discount could bring you more problems than benefits.
Let's start by understanding why they ask for these discounts and how you can better handle these potentially uncomfortable moments.
Why do potential clients ask for discounts?
Most people who ask for discounts don't do it as a way to diminish the value of your product or service; rather, they're trying to get the best deal possible, just as any of us would.
A good reason to ask for a discount on your product or service is not having the necessary budget. Pretty obvious, right? But it's also possible that your prospect isn't seeing the value of your offer, and that's when things get a little more complicated.
Reasons people ask for discounts
- The buyer unconsciously places less value on your product and on you
- Discounts granted prematurely put more weight on price than on value.
- And in the end, you'll lose some of your negotiating power. Successful negotiations require mutual concessions.
It's true. Responding to discount requests during the negotiation is also difficult. You have to meet the client's expectations without destroying your company's profit margin.
Tips on how to negotiate with your clients when they ask for discounts
Before negotiating
- Before we talk about discounts, let's see what you're looking for in an offer
If the price of your product or service depends heavily on the prospect's individual needs, goals, and current situation, it's too early to talk about a discount. Brushing off the prospect's question will make it seem like you're more interested in your agenda than in theirs.
- Do you consider price a major obstacle to making the purchase?
If the prospect's request comes up right after checking the prices, or if your prices are available online, they may not be able to pay the full price of the product and are trying to see whether you'd consider giving them a discount. If you say no, they'll probably walk away.
It's also possible that they can pay the regular price but want to get a discount.
- We'll definitely talk about the numbers in detail, but we need to make sure we agree that this solution is the right one for your needs
At this stage of the sales conversation, a discount request often indicates that the prospect wants to buy. Since they agreed to a demo or a presentation, they're clearly interested in the product. Now they're thinking about the details of the purchase.
Even so, don't offer them a discount yet. Granting the request automatically will make you seem too eager to close the deal, which will work against you during the formal negotiation.
During the negotiation
- Why?
Speaker and writer Jurgen Appelo recommends using this simple, effective response when you're negotiating with buyers who are addicted to haggling. “Keep in mind that I don't say ‘no’ to people who ask for a discount,” he adds. “They may have a very good reason for asking.”
- I can offer you a discount if (we extend the contract, adjust the payment terms, you choose package or tier X, you register Y number of instances)
Compromise is essential to most negotiations. By offering a discount in exchange for a concession, both you and the buyer will benefit.
- What would need to happen for our offer to be worth the price we shared with you?
When a prospect insists on lowering the price, they may not have enough budget for your product or service. It's also possible that you simply haven't done a good job of selling it.
By asking “What would need to happen for our offer to be worth the price we shared with you?” you can uncover important points you didn't mention and identify objections that are still present.
- Could a month-to-month plan be enough to close a deal today?
You may not be able to offer something like that. But month-to-month plans can be a good way for your prospects to close a deal without you having to discount your product or service. If you think a prospect is a great fit for your solution, a monthly contract shouldn't scare you.
Conclusion
It may be difficult to try to reach an agreement with the client, but with the tips you just read, you'll be able to close the deal more easily or reach an agreement where both sides benefit.
Just remember not to give in too easily, but don't be inflexible either; talk with your clients and clear up all their questions together.
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