In 30 seconds
Asking for a discount can be customary or a signal of needing expense justification. For businesses, avoiding unnecessary discounts is crucial. Discounting devalues offerings, sets poor examples, and erodes trust. The key here is to understand the reason behind the haggling. Then you can either consider meaningfully adjusting your solution to your customer’s budget if that is the issue or offering an add-on. However, any extra offering must align with the solution and add value to it. Transparently communicate value, tailor solutions, and provide meaningful add-ons. This not only builds trust but also enhances your reputation as a quality provider. True worth goes beyond price.
In 2.5 minutes
For some people, haggling is part of a normal procedure or a signal that they need help justifying the expense, and in some businesses, it’s how they do it, it’s the way they buy. So how can you help them?
We consider discounting a tactic to avoid in most cases.
Why?
- Because it devalues the worth of what you offer and makes you look desperate when you do it
- It can set a bad example for your team when they see discounts offered with no legitimate reason behind it.
- And worst case, giving discounts can erode your customer’s trust in you as a fair business partner. “If you work with XYZ, don’t pay the price they initially quote, it’s always too high, they will give you the real price only if you ask for a discount.” No one wants their market to talk about them like that.
- A legitimate case for discounting is Volume Pricing where you offer a lower cost per unit because of high volume purchases – this one does make business sense and rewards high spend and loyalty.
So, what to do instead of opting for discounting?
Well, it depends. If it’s a matter of the buyer’s budget, and it’s possible, you can leave out something from your solution. You offer a smaller solution package that still goes someway to solving your customer’s problem and is priced accordingly.
As mentioned, where relevant, consider volume pricing when your product/service is a good fit.
If it’s a matter of business/personal culture, then a good strategy is giving something else instead, providing some additional value for the customer without discounting the quality and effort of your work.
However, here’s where most businesses get it wrong: A shopping voucher or tickets to the cinema are hardly good trade-offs for a B2B buyer and their relevance varies significantly among B2C buyers as well. So, when offering an ‘extra’ instead of a discount, or an incentive to buy, what your offer has to be relevant to your solution.
The key to navigating the delicate balance between customer expectations and preserving the pricing integrity of your offerings lies in crafting a relevant value-driven approach. By understanding the underlying reasons behind haggling and maintaining your products’ or services’ worth at the same time, you are fostering good and trusting relationships based on mutual benefit – a fair exchange of value. By transparently communicating value, tailoring solutions, and offering meaningful add-ons, you can steer conversations away from price discounts and towards a shared understanding of the value you bring to the table. This approach also elevates your business’s reputation as a provider of quality solutions, reinforcing the notion that true worth transcends a mere price.
Remember, everybody lives by selling something.
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