Sales Discounting, Should Sales Staff Do It?
If you have to discount to bring in the sales, are you bringing in quality leads? Are sales discounting worth it? This is an excellent question when you ask, “How do I get my salespeople to stop discounting our products and services?”
To understand this problem, we need to understand why we give discounts first, what benefits they have for the company, and when you should and should not offer discounts.
Discounts and coupons are often used to bring in new sales. Now we must reconsider whether this is a proper method of bringing in new sales. Would it make more sense to get quality leads and then give your discounts to repeat customers to thank them for their loyal service?
A customer who chooses you just because of a discount may not truly value your product and what it offers.
What are you selling?
One of the first things you need to ask is what is for sale and why you’re charging what you’re charging for it.
Sometimes salespeople offer discounts because they want to draw in a sale quickly, but will that person be a repeat customer once the sale price is gone? Are they buying because they like and want the product, or are they buying because the discount entices them?
People love to get a deal. This has been proven time and time again in sales case studies. Studies have shown that people will take a plain old rock found off the ground if you put it in the street with a sign that reads “free.” They don’t need the rock. They probably don’t think there is anything special about the rock. But they feel compelled to take something because it’s free.
People may feel compelled to take something just because it’s free
This is the same impulse that causes the consumer to jump on something when there is a discount. So again, ask yourself, is sales discounting worth it?
So we had to look at “Why is that happening?” And the question is, is that because of–again, we’re back to weak sales leadership? As a salesperson, if you are not confident in your product and the price, it will show when you are giving your sales pitch.
When the conversation comes around to price, if your voice quivers or you do not feel confident in the price, then the person on the buying end will likely take this as a sign to ask you for a discount. When you are confident in the product and the price point, you should be able to sell it at this price point.
Why do people buy?
When looking at how to stop discounting by your sales team, you need to look at why people buy. There are so many different reasons why people choose to buy things and why they pick what they pick to buy. Let’s create an example: we all need toilet paper, right? But if you surveyed five different consumers on their toilet paper purchases, you are likely to find that they each have different reasons for why they are choosing this toilet paper.
Some people buy based on price. Some people buy based on the ply and the softness of the toilet paper. Still, others buy the brand that they always find at their favorite store.
One might buy the brand that their mother always used because it reminds them of home and gives them comfort and familiarity. While we all need toilet paper, we don’t all have the same reasons for why we choose what we choose.
People are discounting- this is a symptom of a bigger problem.
When you spot the symptom, you need to take the time to discover the bigger cause. Then you can fix it. What are you doing to correct or prevent this problem in your sales team?