Sales: The Dark Side of Discounting
Sales: What’s the cost?
Sales: By Liz Wendling, the sales coach for women
During tough times, people like bargains and discounts, but they also like quality and certainty. Many buyers have come to expect discounts as a “new” part of the sales process and have no trouble asking for them. Your potential customers are nervous, tightening their spending and shopping around for the best price, but selling on price alone comes at a cost.
There’s no doubt that discounting could provide you with a quick sale and occasionally improve overall sales. Discounting might help to boost sales and attract new customers in the short-term, but from a strategic perspective it can have a negative impact on your product or service. It’s important to consider the potential consequences of slashing your prices. This can lead to encouraging customers to wait for discounts before making a purchase.
Every industry is becoming more competitive and your customers are taking a closer look at what your competitors have to offer. Is the new low-price competition stealing your customers away? The most challenging problem business owners and salespeople struggle with in today’s economy is how to defeat the competition without slashing your prices. Sales Coaching programs teach people to sell on value, not price.
Part of your ongoing battle with competitors is on pricing. They lower their prices, and you feel forced to keep up with them and lower yours. There are different strategies involved in pricing that don’t always involve cutting prices, but they do involve being more competitive.
Discounting seems so innocent; but it can be tragic to your bottom line. What seems like a minor concession in order to close a sale often has serious consequences for a company. Lowering your prices weakens your business, stunts its growth and makes it more exposed to an attack by your competition. There is nothing stopping business owners and salespeople who choose to compete on price. You can always lower your price and close a few sales. But at what cost? If you want to sell more products or services, more profitably, to more people, you must resist the temptation to discount and begin focusing on value.
Instead of discounting, learn to create value for your client so they don’t feel like they have to ask for discounts. After all, your willingness to give a discount may send a message that you don’t think the value is there. But if you must discount, get something of equal or greater value in return; perhaps a larger order, an accelerated payment schedule or some other concession.
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