Nine Reasons Salespeople Discount When They Shouldn’t – by Don Cooper, The Sales Heretic™
One of the most frequent complaints I hear from sales directors, VPs, and CEOs is that their sales team—whether it’s internal or their distribution channel—discounts too much and too often.
While it’s maddening, it’s also excruciatingly common. Here’s what drives that behavior:
1. Fear of losing the sale Every salesperson fears losing the sale. So when a prospect asks for a discount, the salesperson often thinks the sale hinges on whether or not they give one. Salespeople rationalize to themselves that a small commission is better than no commission at all.
2. Fear of confrontation Many salespeople—and even more professionals and business owners—hate confrontation. And because they see negotiating at confrontational, they acquiesce to discount requests in order to avoid it.
3. “Everybody does it.” In many industries, discounting is the perceived norm. When salespeople believe they have to discount because everyone else does, discounting simply becomes part of the expected process, both for the buyer and the seller.
4. Don’t understand why they shouldn’t Too many salespeople don’t understand the damage that discounting can do to a company’s profitability. And too many professionals and small business owners—most of my coaching clients among them—don’t even know what their profit margin is. As a result, they discount because the see a short-term benefit—a quick sale—rather than a long-term problem.
5. Don’t appreciate the product’s—or the company’s—true value Value is subjective. We all value the same products and services differently based on our likes, dislikes, priorities, fears, biases, experiences, tastes, and more. So sellers often don’t see the value of what they’re selling the same way buyers do. This is especially true in B2B sales, where salespeople are often selling things—chemicals, machinery, software, advertising, business services, etc.—that they would never buy personally. When salespeople don’t fully appreciate their product’s, service’s, or company’s value, they cave to discount requests due to ignorance or even guilt.
6. Unable to articulate the value Even when the salesperson does appreciate the value of what they’re selling, too often they are unable to communicate that value to their prospect. That results in pressure to discount.
7. It’s the easiest thing to do Articulating value, justifying price, and negotiating require time, knowledge, and skill. By contrast, discounting is fast and easy.
8. Their managers encourage them to Pressure to discount doesn’t just come from buyers. All too often, sales managers—either tacitly or overtly—pressure their salespeople to discount. Sometimes through their own example!
9. No one has taught them any other way While some salespeople discount just because it’s the easy way out, many do it because they don’t know any other way of handling discount requests. Nobody has ever trained them how to deal with buyers pressuring them for discounts. (When I conduct training seminars, it’s always one of the biggest frustrations attendees have.) In the absence of training, people do the only thing they know how to do—say yes to a discount.
The good news is that all these issues can be resolved through effective training. Buy a book for everyone on your sales team, invest in some audio or video training programs for them, or bring a speaker in to your company to speak to them.
Buyers will never stop asking for discounts, for the simple reason that it’s in their best interest to. Salespeople need good reasons to be able to say no.
Don Cooper—The Sales Heretic™—is an internationally-acclaimed sales expert who helps salespeople, business owners and professionals dramatically increase their sales. He delivers custom training and keynote speeches for corporations, associations, chambers of commerce and other business organizations.
You can contact Don at 303-832-4248 or through his web site, where you’ll also find more articles, tips and The Sales Heretic™ blog: www.DonCooper.com. In addition, you can connect with Don at www.linkedin.com/in/salesheretic and get daily sales tips and more via Twitter at https://twitter.com/DonCooper.
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