How To Respond When The Prospect Asks For A Discount

Written by Sean McPheat | Linkedin thumb

Percent sign in handsNo doubt you’ve often got to the point in a conversation where the issue of price has been brought up.

You’ve presented the product or service and the prospect has shown interest.

You’ve discussed the value you could offer and the prospect has agreed that the product is right for them.

Then comes that moment many salespeople dread.

The prospect asks for discount.

It’s the moment when many salespeople have palpitations and capitulate far too easily.

The only problem with agreeing to a discount is that it cheapens the product rather than increasing the value.

So, here’s a way to handle the discount question:

“I understand, Mr Prospect, and everyone these days is looking to reduce costs. Tell me, when you say you wish to have discount, can you tell me why?” 

This enables the prospect to be more specific on why the want discount and, possibly, what figure they might be thinking of.

If they reply that they want, say 20% discount, it helps you to decide how you’ll approach the situation.

Let’s say, for argument’s sake, the product is £1000 and they want it for £800.

That doesn’t seem a large sum to have to discount, but the problem might be that it sets the precedent, plus it eats in heavily to your margins.

Here’s a question that you might ask:

“Are you saying that you don’t want to pay £1000 for this product, or that £800 is all you want to pay in total?” 

This gets the real issue out in the open. You find out whether they really want the product and their connection to it, or whether it’s the money that’s the issue. If they say the problem is with the money (“we simply can’t afford that at the moment”) they are telling you that they want the discount because of monetary issues.

Your reply could be: “I understand. Let’s take a look at what we could offer you for £800 right now. We have a smaller version that would fit the bill for you. It’s different in these ways (list the differences) but it would save you the £200, so we will be able to meet your cost saving requirements.” 

Now, normally one of two things will happen now.

Either the prospect will agree to go with the cheaper product (in which case you still maintain your margins) or they will say they still want the more expensive product but still insist on the lower price.

If it’s the former, you can sign them up on the spot. If it’s the latter, you can explain why it’s not possible to meet their price demands, but you also recognise the value of the more expensive product to their business.

You could now build up the case for the £1000 product and show them that actually they will be saving in the long run, with better productivity or lower running costs, or whatever the real benefits are of the higher spec product.

What you’re showing here is that:

(1) you’re no pushover when it comes to negotiating

(2) the product is actually worth what you’re asking for it, and

(3) if the prospect really wants the £1000 product, you might actually adjust the payment terms so that they match what they can pay now and then pay the extra out of the profits they will be making with the better product.

This takes courage to do, as you run the risk of the prospect going somewhere else where they might get the discount.

But it also helps you develop your consultative skills and highlight the real business benefits of your products.

It also helps you determine the value of your services, and helps you find out the real needs of your prospects, without having to reduce your prices at the drop of a hat.

Happy Selling!


Sean McPheat

Sean McPheat
Managing Director

MTD Sales Training | Image courtesy of Dollarphotoclub

450 sales questions free report

Originally published: 30 March, 2016

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