Sales tricks: How to respond to a discount request

“Just one thing, can you make a discount?”

This is a tricky situation for every salesperson. What to do? To defend your company’s interest or to try and close the deal faster. For sales managers, the question is how to set general policy for their team in these situations?

There are 3 main reasons why giving a discount is hurting your business?

1. Giving the impression that your product/service is generally overpriced — If you are willing to give a discount so easy this shows that you are selling at a higher price than you actually value your product/service.
2. Change the focus of negotiations to price, not about the value and impact of their business.
3. Power switch — if the prices are the main topic than you lose the chance to negotiate for the other aspects of the offer with confidence

Depend on the stage of the negotiations this question can be addressed differently and have different outcomes. You need to have a playbook of scenarios on how to answer the request and what results are you looking for. Here are our recommendations:

In the early stage

First of all, you don’t want to be defensive because this could look like a lack of flexibility. There are different reasons why your clients could ask for a discount.

1. They are not familiar with the market and see your pricing as too high for their beliefs. If you block their attempt they will look for other vendors. Yes, they will find out that your offer is reasonable but you will be the messenger of the “bad news” and this minimizes the chances to come back to you.
2. They know how much your service/product should cost but fishing for the best prices. In this case, they will consider more than one vendor and you will lose the chance to explain your benefits if you close the door early.
3. They are experienced in this game and know which button to push. Then you need to “dance” with them and leave this option available

In any case, a straight “NO” will be a little harsher than necessary. Use this opportunity to defend the value of your offer but stay flexible in the eyes of the client.

Ask about the motivation for their request: “Is the price the major obstacle to go forward?” or “If the discount is an obstacle, what is the main need that we can solve for you, so I can adjust the offer?”

Also, you can build trust in them by playing as their advocate “I know what you mean, I understand your position and I can help you. Just tell me more about your needs and I will find the best solution for you”

The most important thing at this stage is to transform their request for a discount in a conversation about their actual needs and keep the door open for the future.

During demo presentation

Ok, you passed the initial communication and now you are talking business. What, how and why. In this stage, if you face a question about a discount this is actually a good sign for you. The client clearly wants to buy but still looking for the best option. They are using the opportunity to ask for a “bonus” early so you can be tempted to offer something more than the competition. After all, they understand that you are a salesperson and you are eager to close the deals. Don’t fall into this trap.

Keep the conversation about the value of your product/service and don’t promise anything. Your position should be “I’m becoming more familiar with your needs and by the end of this stage I will be sure what I change in the final offer”

Final offer and contract negotiations

Here comes the real “battle”. The client is on the hook but you need to close the deal. At this stage, a question about a discount is expected. You are setting the details and the price is a major part of the negotiations. Here is very important to keep the focus on solving the client need first and then adjust the price. In what cases you should consider a discount:

1. Short-term discounts — these options should always be in return for a longer contract

• First-timers — if your client is using this service/product for the first time and still have hesitations about the outcome, offer them a fixed discount period. Make sure they will have enough time to feel the effect but not used to the current price. See it as a paid trial version.
• Seasonal/Period budget deficit — maybe your client is eager to try but currently, they are on a budget that can’t be stretched. Consider a short-term discount and make them loyal to you.

1. Adjustment of the terms — give one to take one

• Longer period — If your client wants a discount they need to give something as well. One option is a longer contract. “10% discount for a 2-year contract”
• Upfront payment — if they pay 6 months in advance they can have a discount, it works in the same way for quantity
• Fewer features/premiums — don’t sell your product/service easy, offer a discount if they are willing to lose some privileges or have fewer features from the package. Or offer something extra for a small rise in the price.

1. Timeline adjustments — if you want to close the deal without a discount

• Offer month-to-month contract (if this is applicable) or extended payment period. In this case, you will have the same price but allow them to work with a more flexible timeline.

In any case, a request for a discount is a sensitive topic. You don’t want to look overpriced but also you want to be flexible and open for negotiations. Try our suggestions and see how they will change your sales cycle.