When should you give discounts?
Do you give discounts? If so, how does that go?
Who are you talking to?
When going into sales conversations, who are you talking to? Is it the final users of your products/services? Is it the economic buyer? Is it the ones who pay the checks? Talking to the wrong person can get you to, sure, make the sale, but at the same time, leave money on the table. Recently, I was talking with a few CEOs on a research for a client. When they got asked about what they were paying on certain items that —to my client and their competitors is big figures— they needed for the…
5 rules on discounting
Giving discounts: taking a price off of something —or adding something up to your offering. But… what’s the reason (or reasons) to give a discount? Is it to give it when they ask for it? Is it to close the deal? Is it because you have no power in the negotiation? Is it because they have all the power in the negotiation? Is it because you can’t say No? Is it because they don’t have money? There can be a million reasons (or even more). And that’s fine. One thing you can ALWAYS say, and need…
Going deep on discounts
If you’re going to discount, here’s a more detailed view of yesterday’s rules: Specific.Needs to explain WHY they’re getting the discount. In exchange for something in return.Needs to say what’s being given in return for the discount. Explicit.Needs to be stated in the proposal what, how and why the discount is there. Time-bounded. It has to be in a defined timeframe.Needs to be a take it now, or leave it. Written at the end of the quote/proposal for what it is “Discounted price”.Price →…
You’ll be forced
“And remember: if you can’t differentiate yourself from your competitors, you’ll be forced to compete on price.”Jonathan Stark Just that. You can read Jonathan’s full post here.
Culture
A set of behaviors shared and understood by a group of people. Behaviors that are tolerated or reinforced. Whatever behavior you accept and tolerate (from your own team, customers, suppliers, competitors…) is the one that will define how you act —consciously, or unconsciously. Choose wisely.
Friction
“You need to reduce friction” That can be true and helpful in a context. And wrong on others. On others, you need to produce friction. To create (or encourage) change, you’ll need friction. Without friction your wheels will spin on the same spot, there won’t be movement. And to change things, you need to feel that movement. Does it have to be radical? Not necessarily. Does it have to be soft? Not necessarily. It does have to be at critical points. Friction applied at the wrong spots will also…
Money is not a problem.
In a negotiation in behalf of a client, I asked my client: “Please give me the prices (at full) for these 2 programs your customer wants to buy. Money is not a problem. They have as a minimum 24K euros.” The answer? “Here. This is the price —but we can always offer it for less.” The “less” price? 16K The fear of “losing” the opportunity pushed them to go to a default state of discount, making them leave money on the table; despite having the extra approved budget. Fear… it’s not your best…
How much effort?
The more effort/passion/premium you put in requires a higher price to your market? What are your thoughts on that?
The answer is no
If… something takes you a lot of effort, you put a lot of passion into it, takes you more time to deliver, has more costly inputs, you learned it for a long time… That has nothing (or very little) to do with how much you price it for. Put it this other way: If it takes you no effort. You don’t get over-invested into it You can deliver in no time Costs you nothing You learned it in no time Would that be without value? Getting to know how to do something at a level of mastery that creates a…