One of the biggest reasons I don’t like discounting is that it not only destroys the value proposition, it also attracts lousy customers.
Customers who are price driven are the same ones who are going to push you on everything else.
The problem is too many times the salesperson doesn’t realize until it’s too late. The general feeling is that discounting the price to get a sale is better than no sale at all.
Sounds simple, right? And it sounds like the only loss is in profit. The reality, though, is the loss is much bigger than just profit.
Once a customer knows they can push you to get a lower price, then they begin to think they can push you for other things, and this is where the situation can really start to spin out of control. The pushing winds up being a drain in so many different ways.
Typically, the pushing winds up being in additional services that not only take time but also resources. The result is the sale that was already discounted becomes even more discounted due to the additional work involved.
Some of you reading this are thinking the additional requests from the customer are merely ways to demonstrate great customer service , and that makes sense, but it comes at a cost. The additional cost winds up having little chance of paying off, because the customer never does come to accept the full price — even on future sales.
If your goal is to attract cheap customers, then by all means, discount your price.
If, on the other hand, you want to protect your bottom-line and, more importantly, keep your costs under control, then discounting is the last strategy you want to employ.
I will argue with anyone that building a business upon a discounting strategy is going to be painful in the short-term and the long-term. It’s simply not worth it!
Copyright 2013, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.