The Effects Of Giving Discounts On Your Products

I always enjoy reading true stories that readers send in. They offer a real perspective on how life is like for sales guys out there in the big world.

Sometimes these stories highlight points that are worth sharing and today’s post is exactly one of those. Here’s the story I received, as I received it…


I work for an electrical engineering company and one day I was working on some lead generation when one of the directors, Let’s call him “Bob”, came into my office and told me what had just happened to him.

Just a bit of back ground, Bob is a straight talking, grew up on a farm, from a small village kind of man.

2 Salesman from one of our potential suppliers arranged a meeting with him about looking to supply us with their product. They only really have one product but in infinite sizes, shapes, colours and materials.

They had a nice car, well dressed and a fantastic sales pitch with loads of examples of work that they had completed. All of this work was “on time and under budget” really dynamic pair who worked well together. (even if they did talk a little too much).

After this pitch, Bob said that’s all very well and good but your rival, company “x” are offering me what you are offering me but 30% cheaper. So why should I choose you?

As quick as a flash one of the dynamic young salesman said, “well, we can drop our prices by 30% for you” (oh dear)

Even quicker, Bob replied (very angrily), “you walk into my office, waste my time, and try and rip me off?!!”. “That’s it I’m never using you again, you can let yourself out!”

To this date we haven’t placed any order with them and it doesn’t look like we will be doing that any time soon.

This proves a point that has been widely publicised by selling professionals, “selling isn’t about price, It’s all about VALUE”

Thanks for the time taken in writing your sales tips,

Kind regards,


I think ‘Bob’ did exactly what most of would like to think we would do. The simple act of cutting price does NOT add value…it simply cheapens the product.

Remember…if you try to sell your services simply by cutting prices to match or beat the competition, you’re saying to your prospect that it isn’t worth the asking price, and you’re willing to accept less than you originally asked. The problem with that is that your prospect doesn’t know WHEN they have got the best price. Could they have got an even better price? They may never know.

This story shows once again how customers react to discounts. Think carefully before you cheapen yourself.

Happy selling!

Sean McPheat

Managing Director

MTD Sales Training

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The Best Answer To ‘Can You Match Their Price?’

Most salespeople dread the question that asks if you can match the price the competitor has offered. It immediately puts you on the back foot, as you probably wanted to concentrate on how your products would benefit the prospect and now they want to discuss price.

It can be hard to judge when price should be brought up in the conversation. Sometimes the prospect will allow you to build up the value before the issue of price is discussed. Other times, the prospect will highlight their need to know the price early on. Most of the time, you don’t have much control of when this happens.

So what should be your response when the prospect asks if you could match the competition’s price?

Firstly, you should be absolutely crystal clear that you know exactly what the competition have put forward as a ‘price’. Could it be they are making a special offer just to get this customer’s business. Are there strings attached to the price they have offered, e.g. payment up-front, no discount, delivery differences, etc?

Be clear what the competition are offering before you agree to discuss any price issues.

Here’s one way that you can deal with this kind of discussion:


Prospect: Your competitor is 15% lower than you. Can you match their price?

You: Thanks for sharing that information about their price. But, to be honest, I’m a little curious. Why are you still looking at us when you can get the same value somewhere else at a cheaper price? As much as we’d like your business, if the competition can deliver the same value at the price you say, then I wouldn’t blame you going with them.


This question is simple common-sense. If the competitor is offering a cheaper price for the same value, what’s the reason we are still being spoken to? The prospect must justify the reason they are still keeping you in the frame.


Prospect: We’d still like to go with you…yours is the best solution, but the competition are 15% cheaper

You: Thanks, I appreciate your confidence in us as a solution-provider. Let’s take a look at the proposal we discussed and confirm the highest ROI areas. Then we can both take a look at how we can review some of the points in the proposal to achieve your budget.


So, instead of reacting and quickly discounting your products to match the competition (which might make the prospect think he can get an even better deal if he went back to the competition), you can discuss with the prospect which areas weren’t as important to him as first thought. It’s not about the discount; it’s about what they are willing to commit to in order to still solve the problem or take advantage of the opportunity.

Remember, it’s all about getting the prospect to determine if they can really afford NOT to have your solution. The above responses can help you redirect the attention away from price and toward the real reason why they will make a choice…the best solution to their current needs.

Happy Selling!

Sean McPheat

Managing Director

MTD Sales Training

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The Proper Way To Reduce Your Price During The Close….But Only If You Have To!

Offering a discount to help motivate the prospect can often be a powerful inducement to close a few more sales.  However, dropping your price in the wrong way will cost you a ton of lost sales, it will reduce your margins to nothing and in addition you could lose the prospect’s trust and respect and possibly damage the credibility of your company.

The Steps to a Price Reduction (In the right way!)
Offering a discount is a delicate issue and you should only use it as a last resort.  However, when necessary, follow these steps:

1. Stand Firm 3x

2. Build Value 3x

3. Reduce the Price for a Valid and Justifiable Reason

1.     Stand Firm 3x
After you have offered a price and attempted to close on that price, you have to understand that you cannot just arbitrarily change it.   Once you made an offer, you must stick to that original offer and price as long as possible.   If you change or reduce your price too quickly, then what was your first price? Was the first price just a way to see how much you could get?  Stand firm on your original price, and close on it at least three times, before even thinking about a discount.

2.     Build Value 3x
As you are closing on the first price, continue to raise the value of the product or service.  Remember, price objections are actually about value, not money.  Continue to increase the value and costs of the prospect’s problems and pain. Raise the value of the original offer at least three times.

3.     Reduce the Price for a Valid and Justifiable Reason
Now, you are ready to slightly reduce the price, but only for a good reason.  You must have some justification to lower the offer.  If the prospect feels that your price drop is nothing more than the stroke of a pen, it becomes worthless.   Find valid reasoning and reduce the price as if it is your money that you are giving away. So you can drop the price by 10% but what gives? Also, this is also a great place to get referrals.  You can essentially buy the referrals from the prospect, offering the price reduction in exchange for contacts.

  • Stand Firm 3x
  • Build Value 3x
  • Reduce the Price for a Valid and Justifiable Reason

If you reduce the price incorrectly, you reduce the value along with the price.  If you price drop as above, you will raise the value as you reduce the price.

Happy Selling


Sean McPheat
Bestselling Author, Sales Authority & Speaker On Modern Day Selling Methods

MTD Sales Training

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A Good Way To Deal With Discounts

One of our trainers is looking for a new car for September delivery and he shared with me his experience at his local dealership. I thought I’d share his story with you…

“I had settled on a new model, agreed the spec and was ready to negotiate the price downwards with the salesman. I teach this stuff, so it should be a doddle, I thought.

I asked what was the best price he could offer on this model. He looked at the price list, then at the car, then at his manager. I thought he was going to try the old ‘let me talk to my manager’ ploy, but instead he asked me ‘What price do you have in mind?’

‘Goody’, I thought. ‘I can name my own price!’

I knocked £1500 off the sticker price, more than 10%.

He then asked me ‘Do you care how I get you there?

This made me think for a few moments, because if I said no, I knew what he would do. If I said yes, he would have asked me what the conditions would have to be to get to the target price.

As price was my main issue (as it is with many discount shoppers) I answered the question with a ‘no’.

This opened the door for the salesman to look at alternative ways to get to my target price.

He asked ‘Is it the fact that you don’t want to pay the asking price at all, or you don’t want to pay it for this car?’

Cue another few moments of thought-filled silence! I answered that I wanted this car, but wanted the discounted price.

‘OK’, he said, ‘let me see how we can get to that price for you’.

He then proceeded to go over the value to me and my family of the choice I had made. I was actually feeling that it was worthy of close to the asking price…I was even feeling a bit cheeky asking for that much off.

He said he could get to the asking price for me, though I would have to go for flat paint instead of metallic, knock off the three year warranty that had been included in the price, take out some of the accessories he had persuaded me I needed, and take his dealer’s finance package, which was 2.9% per annum more expensive than my bank’s deal.

What did this poor old buyer do in the end? Accepted a £500 discount and got my metallic paint, a two-year warranty and accessories back!

Yes, yes, I know…but I had fallen in love with the car, and my emotions won out in the end.

I also asked if he had been on any training courses recently! He told me he was the number one salesperson in his dealership on revenue and profitability, and he also had attended most training courses out of all his colleagues in the past two years.

Naturally, I wasn’t surprised”

Interesting! Maybe that question ‘what price do you have in mind?’ isn’t the best in all situations but it gives you an idea of what you have to move to if you have some margin available.

The other question, “Do you care how I get you there?” gets the customer to consider what’s most important to them. If, like our trainer, you say that the target price is most important, you can see if there’s anything you can do to get to that price.

What you’re basically saying is that, if the price is the only criteria that’s stopping the client from buying, moving the specification, warranty, payment terms, credit facilities, service back-up or other additions can help you get closer to that price.

And if they balk at that, maybe the price isn’t the most important aspect of the purchase after all.

Makes you think, doesn’t it?

Oh, and our trainer has been ribbed all week in the office!

Happy selling!


Sean McPheat
The UK’s #1 Authority On Modern Day Selling
MTD Sales Training

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The Dangers Of Discounting

You’ll know how difficult it can be out there to maintain your effective pricing strategy. How often have you been drawn into a price battle with your customer, with the biggest threat going through your mind that you’ll lose the sale if you don’t discount?

Before you do offer a discounted price, bear in mind the following dangers associated with lowering your original figure:

  • When you offer discount, you set a precedent. The new price you offer is the reference point from which your customer will start negotiating. When you discount, it’s telling the customer that’s the starting point, and it’s going to be mighty difficult to raise prices again in the future.
  • Your pricing point creates an image for your product and your company. By discounting, you effectively reposition your brand message. You are sending the message that your product isn’t as good as you say it is, and you turn it into a commodity, rather than something of value to the customer.
  • You tell your competition you are willing to start a price war. When your competition see you discount, they will retaliate by cutting prices, and it’s a downward spiral.
  • You are less profitable, and you earn less money. You become more dependent on a price-only strategy, eventually leading to a policy that focuses less on what you can do for the customer and more on cutting costs. This means you have less to invest in R&D and product enhancement, stifling your growth and leading to poorer quality.
  • You send the message to your customers that, because your focus is on discounting, you might as well shop around for the cheapest price anywhere, because I have nothing to offer you but a lower price.
  • Since the only way your company makes money is through the profits you bring in, you have to start looking inside your company to cut costs. You start asking questions like ‘how can we save a little on quality costs?’ and ‘do we need all these people to support our discounting salespeople?’. You have to cut costs on the inside because you aren’t making the profits on the outside.
  • You tell the whole world that your products and services are not as valuable as you suggest they are, making the customer wonder where else you might not be strictly honest.

Do a study on how much your discounts actually cost your company. You may be surprised by how much your short-term thinking affects your long-term prosperity.

Happy selling!


Sean McPheat
The UK’s #1 Authority On Modern Day Selling
MTD Sales Training

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