Discounting Is For Wimps

The Problem with Over-Discounting: 3 Tips for Higher Margins and Happier Customers

When was the last time a customer or prospect asked you for a discount? If you are like most salespeople, it was probably today. So how did you handle it? Did you expect them to ask for it? Probably. And when they did, did you know exactly how you were going to handle it?

Truth is, it feels like it’s a better time to be a buyer than a seller, doesn’t it? As a result, the new economic culture says that the only way to make it in business is to give away more than you ever did, just to get the same sales volume that you are used to getting. It also means equal or more work with less gross profit. That, my friend, stinks!

While there are certainly times when discounting is necessary, it is up to YOU to break the chain of the “automatic” discount. Not for the sake of being a sales tough guy, but because it is your responsibility to make sure the customer gets a great product and you get a great margin. So try these tips so everybody wins.

Tips for Creating Higher Margins and Happier Customers

1. Stop feeling guilty when you quote a fair and honest price.

You sell great products, and need to show PRIDE in the value they bring. And remember, prospects can smell fear within the first 5 seconds of your financial presentation. If you wince, smile uncomfortably, or use the words, “The price is AROUND ___________,” you are cooked. And remove the term LIST PRICE from your sales language. Those words are translated as “Wiggle Room” to even the average buyer, and immediately signal that you are willing to go lower.

2. Always include three options on every price quote you deliver.

  • Make OPTION ONE your STANDARD package with list price and perhaps one add-on product or service
  • Make OPTION TWO a PREMIUM option with even more add-on products or services.
  • Make OPTION THREE your ECONOMICAL package that includes your product alone…still at list price.

Then confidently deliver that proposal. If the prospect feels they need to be ECONOMICAL, then they will choose an option that still gets you your FAIR price. By the way, if you feel like this is deceptive, then go immediately back to the first tip in this list and read it again!) Another way to do this effectively is by using different leasing or financing options. For example, OPTION ONE might include a 36-month lease on a piece of equipment. OPTION TWO might be list price. And OPTION THREE might be a longer-term lease with a lower monthly payment. Great thing with this approach, ALL three options are at list price.

3. Prepare for Negotiations.

Okay, let’s be straight. There will be times when you have to move on your price. But only AFTER you offered your quote professionally as you see above. If this is the case, you need to be prepared BEFORE the negotiation begins. Make a list that has three columns. It should look like this:

They Ask For What You Can Give What You Will Ask For
1) 1) 1)
2) 2) 2)
3) 3) 3)

Before your presentation, think of the things they may ask for and write then down. Then write down the things you can give and start with things the customer will value that will NOT cost you much. Lowering your price should be last on the list. In the third column, list the things you will ask for IF you have to give. Because you need to make it a habit to NEVER give without getting something in return. Also by doing this, you will be discounting because you WANT to, not because you HAVE to.

By practicing and implementing the above strategies in 2018, you will give away less profit, make more money, and as a result, feel compelled to give more. And that MORE will come in the form of greater service, more eager support and a more sincere effort to do everything you can to prove to that customer that you are worth every nickel that is spent with you. You also have implemented a plan that will put you in an elite class in your industry.

If you’re looking for a new job and would like Floodgate to work for you, visit our Talent Portal to register today.

Brian is author of the book, 20 Days to the Top-How the PRECISE Selling Formula Will Make You Your Company’s Top Sales Performer in 20 Days or Less. To learn more, go to