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

Written by Sean McPheat | Linkedin thumb

4 November, 2011

Offering a discount to help motivate the prospect can often be a powerful inducement to close a few more sales.  However, Proper Price Dropdropping 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

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

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