Written by Sean McPheat |
The Correct Way to Offer a Discount: The Proper Price Drop
“How do you effectively reduce your price to help you close the sale?”
Reducing your price, offering discounts or “price dropping” is an extremely delicate issue requiring skill, practice and a strategy that when done right can do wonders for your business and career.
However, reducing your price incorrectly will result in lost sales, trust, credibility and a truckload of income.
Also, understand that such a practice is not feasible for every industry: you must know your business.
Then, you must know the three steps to an effective price drop:
Step 1. Stand firm
Step 2. Build value
Step 3. Find a justifiable reason
Step 1: Stand Firm.
This is where most sales people blow it.
You’ve made your presentation or you performed a thorough consultation and you made an offer that you claim is your best recommendation, your best price and value.
The customer says, “You’re too expensive” and you say, “Ok, how about this price instead?”
Was your first price just a ruse?
When you immediately begin to reduce your price at the drop of a hat, you’re subconsciously telling your prospect that you were seeing if you could get away with your initial price.
With this, credibility and trust goes out the window!
You should close and ask for the order at your original price a minimum of three times before you even think about changing anything.
Step 2: Build Value
The second step in effectively offering a discount, is that you have to build value.
Most price objections have nothing to do with price or even money. It’s about value.
In fact, almost all objections, one way or another, ultimately come back to a question of value.
That is, in the mind of the prospect, the overall value: the total value of the benefits received from the purchase; do not yet equal the value of the price or fee to obtain that product or service.
Consequently, by simply reducing the price, you simultaneously lower the value.
“Mrs. Prospect, this anti-theft system actually increases the value of your property…”
“Mr. Prospect, everyday your warehouse is losing a ton of money in delayed shipments. Our solution will stop that and increase your bottom line!”
So to recap, first stand firm on your offer at least three times, then add and build value to the product or service, also at least three times. Now you are ready to offer a discount.
Step 3: Find A Justifiable Reason
You must have a valid reason to justify reducing the price.
You need a reason and it cannot be that you want the sale. There has to be some benefit to you and your company to offer a discount.
“Mrs. Prospect, if you could take delivery at the end of the month instead of now it will help us with our surplus stock levels. If you will do that, I think I can get you a better price…”
Have a reason to make the offer and show how it helps you and your company.
In summary: Stand firm on your original price, build the value and then justify the discount and you will close more sales.
Originally published: 16 May, 2017