We’ve reached the last secret on my list of 5 Secrets to Selling at Full Price.
Here is number 5 on the list:
5. Don’t offer discounts. Period.
In the end this is a pretty simple, and yet incredibly difficult to do.
This is the reason I tell many sales managers they should take all pricing authority away from their salespeople.
When I bring this idea up to salespeople, I’m normally met with a high degree of skepticism. Honestly, I’m comfortable with people not buying into the concept when they first hear it.
Not offering discounts must be more than an idea. If it is going to work, it must be subscribed to 100% of the time. Does this mean there are never any discounts made? No, but it does mean there is a structure that is put in place and it is followed.
The best structure for a “no-discounts” policy is one that does not allow salespeople to have any flexibility in prices. Yes, they will argue that they need to have the power to adjust prices.
However, once they get over the fact they can’t control pricing, it is amazing how they focus selling on the benefits rather than on price.
When all pricing power is taken away from salespeople, it should be moved to the sales manager. Strategy is the sales manager can authorize discounts, but only after certain criteria are met.
Objective here is if the salesperson knows they have to go to their manager for authorization, they will be far less likely to do so.
Beauty of this strategy is it pushes the salesperson to focus on benefits and not price, while at the same time still allows for some pricing flexibility should it be needed.
The pricing authority granted to the sales manager must be well defined to prevent them from becoming nothing more than a processor of paperwork. Firm limits in either amount or % must be established, and just as the salesperson is held accountable, the sales manager must be held accountable.
This strategy is near fool-proof when executed with defined limits. In the end, the result is increased profit with zero loss of sales.
Ironically, I have at times found that when this policy is implemented, there eventually is an increase in sales! Reason sales increase is because the salespeople are focused on truly understanding the benefits the customer desires, rather than using price to close a sale.
Copyright 2014, Mark Hunter “The Sales Hunter.” Sales Motivation Blog. Mark Hunter is the author of High-Profit Selling: Win the Sale Without Compromising on Price.