Oh the dreaded discount. I cannot tell you the number of sales people that tell me how they MUST discount in order to make sales. “If I don’t offer a discount, they will run to the competition.”
This kind of thinking is not only incorrect, it’s also costing your organization thousands, if not millions, in lost profits. Discounting is necessary for the Walmarts and Hyundais of the world, but you are probably not them. Here are three ways to ensure that you never have to discount again:
- Let go of the Bargain-Hunters: In discussions about discounting, sales people always bring up the person who will only do business with you if you give them a deal. Stop worrying about those people. They will not make you rich. In fact, building your pricing strategy around attracting those people will make you broke. The Bargain-Hunters make up about 20%-30% of prospects. Just forget about them and focus on the 70%-80% that want real value.
- Help the prospect articulate value: You do not sell your product or service. You really sell an outcome that will improve a prospect’s life or business. What outcomes do you provide to people and how much value does that create. For example, if you sold energy-efficient light bulbs that each saved $100 per year in electricity, those bulbs would be worth far more than just $5. Help prospects calculate the specific value you create, either in savings or in value creation. From there, your price should be insignificant.
- Pile on massive value: Most companies are so focused on offering the lowest price, they squeeze out all value from their product to have a base model. Instead of focusing on the lowest prices, pile on massive value to your product or service to make side-by-side comparisons with your competitors impossible. If you offer a product, what add-ons can you include to create huge value? If you offer a service, are there products that you can throw in to also create that massive value?
By changing your mindset from focusing on cheap pricing to taking pride in being higher priced, you can get away from the discounting mindset.
How do you avoid discounting? Please share in the comments below.
Marc Wayshak is author of the book Game Plan Selling and a sales keynote speaker.