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Should you offer discounts on your products or services?

So, what’s the deal with discounts? Could they help your business? Are they a good idea? Do they work for B2B and B2C? Let’s dive in…

Discounts and discounting are subjects that I get really passionate about. When we look at discounts, we can look B2C, B2B, transactional, online e-commerce, wherever people look for a discount. We aren’t always led by discounts, but as humans we will be more inclined to respond to something when we know that it has been discounted or we are getting a good deal.

But what is important to remember when looking at discounts from a sales perspective is, when you go shopping in the supermarket, be it Tesco, be it Carrefour, be it Wal-Mart, wherever you happen to be in the world, you don’t get to the checkout and ask for a discount. So why should people ask for a discount in sales? And equally if somebody does ask you during your sales process, how should you respond?

So, that's the question I wanted to ask today; is how do you respond when somebody asks for a discount?

The way I look at discounts and the way that works for me in my sales process from a B2B aspect is, I very rarely give discounts.

I might give somebody added benefit. For example, I might give them something extra instead of a discount, or I may even give a lower price for a commitment of time, but I will never give a discount on a one-off. The reason I do that is because the price I’ve set for the services or product I am offering, is the price that it is. I, along with our accounting team, will have done the maths to figure out if the price vs the time, effort, expertise etc is the correct business decision for us. Never sell yourself short, know your worth and know what your skills and experience are worth. Be careful not to discount below your bottom line. If somebody can't afford that, then that's fair enough we can't afford everything that we want, but for those that really want something and can afford it, they will pay at that price.

It's important that you understand that, and actually, I heard a talk recently, and I never stop learning myself, that actually if people don't go… “oooooo”, when they hear the price, you're not pricing high enough and actually that made me smile and I thought ‘that's a really good point.’ So, be sure to consider the price of your product and service before you start to think about discounts and equally think seriously about why you are discounting? Try thinking about a price that is set at the right figure for you and the right figure for the customer so that you don’t need to discount. Not everybody is going to be able to buy from you and you need to get out of that mindset.

It is good to lose sales on price sometimes because you've priced your product accordingly to the market and what it costs for you to do something so you know the quality of your product is holding up but not everyone can afford it. Now yes, we are dictated through competitors when it comes to price, but it's not all about that and it's about standing up for yourself and your skills. As I’ve said before, don’t sell yourself short. Do the maths, and it may help to get an account to help you out, but stick to your guns and say, “no, we don't offer discounts because…’. You’ll be surprised the responses you get.

There will be some prospects who will just automatically ask for discount just to see how you react. And if you go, ‘oh I'll give you 10% off’ they’re like well that was easy, they might ask for another 10% off, so you go down a route that you’re not in control of.

So, when people ask for discounts, and you say, “no, we don't discount”, you can then turn it the other way round and say, “is a discount important to you?” And if they say yes, say, “why is that?” You can then start to narrow down what they are really after, and it can take your objection handling to a whole new level. If they say it's too expensive, then you can also look at those objections and explain the benefits they can expect so that they can see how well priced it is.

So how may you use a discount? Well, particularly if you are selling a solution, or a service that can be run for a varying duration of time, you could look at giving people preferential rates if they commit to time. So, if they commit to 6 months, 12 months, you can change the pricing model on that but never be out of pocket, always do the maths before committing to a price.

Another angle you could look at is lowering the price if they purchase multiple products at one time and giving a bulk discount, or perhaps if they decide they want to add extra services or products to their account after seeing how you work and what you offer, you can compromise a loyal service discount. But, and not to sound like a broken record, but always remember what your real worth is. You need to pitch somewhere where you're comfortable, but where you're comfortable with your value.

Price is a hugely important aspect of your sales process, and if you head to my course page and watch my 7 Steps video course, or for a more detail try the 7 Steps E-book as we cover price in more detail, but as a quick tip is; if you're too cheap, you cheapen you and your brand and your product, and that's so important to consider. Try and avoid the word discount and consider how you word things. You could say “let me see if I can put a package together that will suit your budget” and start to go around it that way. You wouldn't necessarily be discounting, but you might just take one or two things off the proposal that makes it a price that’s works for you and them. You could add in some time in the future to relook at their package to see if budgets have changed at all.

Something that works for my business is trying to add extra bundles on top of the original offering instead of discounts. This works by adding something to the proposal that isn't as costly and so it weighs itself out in terms of cost of production. Let’s see how that might work - you could give them an additional piece of content, an invite to an online webinar, maybe a free how-to video. You could look at offering a free half an hour discovery call, or access to free guides. Make sure it is something with value, so you add even more worth to the price, but you're not discounting it down, and you’re not losing out. You could give them something that you've pre-prepared, so you have the added value instead of discounting. So rather than saying “no” point blank, you can say “I can't do anything on the price, but I tell you what I'll do for you, I'll actually add this in, how does that sound to you?” And therefore, you're giving somebody something additional and therefore they will then feel more inclined to buy.

And how that might look from a product perspective, instead of discounting on a one-off merchandise, you could suggest giving free courses on how to make your product more effective in their business. So, you could say, “I've got this great video that we put together, it's 2 hours, you can use it with all your team, and it will show you how to enhance the product, how to enhance your business using this product. You've invested a lot of money in this product, we're going to show you how to make even more money for your business outside of that”, and they may go, “Oh, that's really great”, and it really gives them a little more to think about.

So go away and think about what you could offer as an additional extra for your product or service. Make sure you consider all the options before offering a discount. Will it work for you? Is there something, with more value, that you can offer instead?

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