Discounting Your Way Into Sales Oblivion

I don't even like saying the word d---------g. I have literally obliterated it from my dictionary with a black marking pen. I'll bite my tongue until it bleeds, before I say the word.

Earlier this week Bernadette, my wife, and I went shopping . . . something I love to do. Just kidding! We were looking for a 3-piece plant stand for our deck. We found one in a catalog and went to the store to check it out.

Bernadette always asks the sales person if he can do better on his price. You'd be surprised how much you can save just by asking.

Sidebar! The word ASK is the most powerful word in a sales person's vocabulary.

Back to what happened. We debated over two different pieces and made a decision. The piece we didn't select had a 30% discount tag on it.

According to the sales person the 3-piece set we decided on was not on sale. Our sad faces didn't seem to move him. He said he could get into trouble for giving us a discount.

Another sidebar. The GNP of the United States would increase by a staggering amount (Probably hundreds of billions) if all salespeople got into trouble with their organizations for giving discounts.

Back to the store. The salesman said the display unit was the only one available. Bernadette asked for a discount if we took the floor display.

He caved in and finally said I'll give you a 10% discount.

Here's the math: The list price was $178. 10% equals $17.80.

He could have said, after doing the math, I'll take $15 off because it's a display unit. The $15 is 8.4%. We would have been thrilled. And you can bet the ranch, we would not have reached for a calculator to see what the percentage discount was.

In my opinion dollars off always sounds more impressive than a percent discount.

Because it was a display item the salesperson had to remove some things before he could bring the 3-pieces to the cash register. Bernadette inspected each piece. They were painted black and one had a sizable and noticeable scratch on it.

Bernadette once again asked if he do any better on the price because of the damage on the 3-piece plant stand.

It's time for more math. Remember he first offered us a 10% discount.

If he increased the 10% discount to 12% the increase is 20%.

If he increased the 10% discount to 14% the increase is 40%.

If he increased the 10% discount to 16% the increase is 60%.

If he increased the 10% discount to 18% the increase is 80%.

If he increased the 10% discount to 20% the increase is 100%.

Without any hesitation he said I'll give you 20% off.

He doubled his original discount. It doesn't sound like much but in reality it is. The plant stand list price was $178. For other products, perhaps even yours, it could have been $1,788, $17,888, $178,888, or even $1,788,888.

Don't be too quick to give discounts, especially big ones. Use your head and do the math before you offer additional price concessions.

Forget about defending your price and do your best to explain your value.

Here are a few more things to keep in mind:

If you offer genuine value - don't give it away, charge for it.

If you absolutely must offer a price incentive, never start with round numbers. Make sure there's a decimal point included.

For example, any professional sales representative offering 5%, 10%, 15%, 20% off etc. should have to listen to seven straight hours of Lawrence Welk Music. If you must offer a concession try 3.9%, 8.9%, 13.6%, 19.3% etc. Once you calculated the discount % convert it to dollars because it always sounds like more.

Never offer a price concession without getting something in return - NEVER.

Finally, a small disclaimer. Please don't think I'm violating my pricing strategy when you see me offer special incentives for my products. My speaking and consulting fees are at list price and I seldom offer any discounts.

I have negotiated very good pricing for all my products. And I'm happy to offer you a price break from time to time if it helps you to invest in your self-development. See the end of this letter.

In a nutshell - anybody can offer a discount.

If profitability is the applause of a happy customer you should be raising your prices, especially if your customers are happy.

Jim Meisenheimer is the creator of No-Brainer Sales Training. His sales techniques and selling skills focus on practical ideas that get immediate results. You can discover all his secrets by visiting his website: http://www.meisenheimer.com

---

Sales Forecasting For New Businesses

Sales forecasting is the process of organizing and analysing information... Read More

Profitable Relationships: Is It Amateur Hour or King of the Hill?

"We're in the relationship business?...airplanes are what we use to... Read More

A Real CRM Strategy or Just Tracking Customers?

Exactly what is CRMThe idea itself is nothing new; its... Read More

Speed-up Your Sales Cycle

This week's article is my response to a question by... Read More

Run a Productive Business From Your Car-Office

The way we do business has changed dramatically over the... Read More

The Hardest Job Of A Trade Show

You've heard this before: There were four people named Everybody,... Read More

Book of Lists Marketing for Pressure Washing Companies

The American Business Journals produces a Book of Lists each... Read More

How to Develop a Proactive, New-Business Sales Team!

I don't know about your business but in my experience... Read More

Sales Marketing: 12 Sneaky Tricks To Help You Outsell Your Competition

Business can be like war sometimes.You may have to fight... Read More

Beyond the Golden Rule

There are several types and sub types of people in... Read More

The ACCOUNTABILITY Challenge for Today?s Business Management

In today's 24/7 driven business word, accountability is becoming a... Read More

A Coachs Handbook For Sales Managers

This article may be reprinted in its entirety with express... Read More

Investing in Your Sales Team

While there's no easy answer to this question, there are... Read More

Raise Concern About Sales Competition, Not About Yourself

As you are reading this sales article, read very carefully.... Read More

How to Beat the 80/20 Rule in Sales Performance -- Part 2

Another key reason why companies suffer from 80/20 performance is... Read More

Effective Sales Territory Management

How you prioritize your sales territory management activities depends upon... Read More

Sex, Drugs, & Rock-n-Roll: Trade Show Traps and Tips

Sex, Drugs & Rock-n-RollHere's the Scenario...You're at a trade show.... Read More

Producing Premium Performance

One of the major issues that arises in managing a... Read More

Outsourcing the Sales Function

Small to medium companies that want to increase sales or... Read More

How to Maximize Account Penetration and Jump-Start Sales

Maximizing account penetration is one of the most critical functions... Read More

Energize Your Organization

No matter what you do, it seems, your employees do... Read More

Finding A Sales Force That Pays For Itself

The elements involved in building a sales force, especially one... Read More

The Surest Way to Boost Sales

If you have a small business and you are looking... Read More

All Small Businesses Need to Gather Community Intel

How well do you know your community? As business owners... Read More

Sales Coaching... Fact or Fiction?

The old adage in selling has always been, "Find out... Read More

Increase Your Sales - Accept Credit Cards

Many people today simply prefer the convenience of paying by... Read More

Overcoming Sales Objections for Small Business Networks

Do you need help overcoming sales objections? Do you sell... Read More

How To Use A Powerful Leadership Tool To Step Up Sales Results

Good sales people can close, but few "step up" for... Read More

Hire A Six, To Consistently Produce Sales Success

For many years as a sales manager, I would only... Read More

Franchise Sales; Recruiting of Laid Off Employees

Because of corporate downsizing, many people have been laid-off or... Read More

Why Performance-Based Recruiting Produces Top Sales Performers

Many recruiting ads and job descriptions include "knockout factors" that... Read More

Sex, Drugs, & Rock-n-Roll at Trade Shows

Here's the Scenario...You're at a trade show. Out of town.... Read More

Five Steps to Maximize Success in Targeting For Growth

Targeting is the process of selecting high potential customer accounts... Read More