With tougher times comes bigger demands from customers for more substantial price reductions. All too often, and out of fear or desperation, suppliers yield and drop their prices. Often to below profitable levels, writes Malcolm Gallagher of BizVision
Here’s how to resist those price cut demands and turn then tables on your customer. Let’s start with how you handle discount requests.
When someone asks you for a discount, what do you do? Do you just give them a discount?
If you give in here’s what happens
If you give in or yield, then your prospect is going to think one of several things:
- You seem desperate for the sale.
- I wonder how far you will lower your price and maybe I should have asked for an even bigger discount.
- The price you originally offered was not the real price. Are you trying to trick me? Can I really trust you?
- You don’t set a very high value on your own services and products if you are prepared to discount so quickly.
- You agree your price is too high. This is a problem.
- Next time I come to buy anything from you, I’ll ask for a discount again – an even bigger one.
Just giving a discount sends the complete wrong message and has a significant impact on whether your prospect trusts you or not.
Plus giving a discount can cost you the sale or get you a sale you regret later.
So what must you do instead of just giving a discount?
Instead of just giving a discount when asked for one, turn the whole conversation around and go for a higher priced sale. I know this is counter intuitive but it is not that hard to do and it works.
Next time you’re asked for a discount, what if you could increase your sale by 10%? What if you could in fact double the price of your sale? What would be the revenue value to you?