The Correct Way to Offer a Discount
"My last six prospects have been giving me the runaround, asking for all sorts of extras, changing their minds about buying," my friend complained.
He clearly wanted my advice, so I asked: "Have you changed the way you sell?"
"That's the most confusing part!" he responded. "To prevent this sort of back-and-forth, I've started offering a discount if they book right now."
The way my friend was discounting was making it more difficult, rather than less, for customers to decide to buy from him.
There is an effective way to discount, but before we get to that, let's look at why discounts at point-of-sale (aka "fly-fish closes") don't work.
When you spring a discount in order to close a deal already in progress, it reduces your credibility and makes you seem pushy.
For example, suppose you say something like: "My price is usually $1,000, but if you buy today, it's only $900." This remarks tells your prospect two things:
- Your real price is $900 but you're willing to charge the prospect an additional $100. Therefore you can't be trusted.
- You want the prospect's decision to fit your timetable, not the prospect's timetable. Therefore, you are pushy.
Customers are leery of buying from people they don't trust, so the customer in this case hesitates to make a decision, despite the "deal" that's being offered.
Even more important, as you might remember from high-school physics, every action creates an opposite and equal reaction. This is absolutely true in selling. The harder you push, the less likely it is that the customer will buy.
To avoid raising the customer's hackles, discounts should be offered before the sales process begins. You do this by either advertising the discount ahead of time (the most common approach in retail sales) or giving the prospect a heads-up at the start of your conversation, like so:
"Before we talk about your needs, I just want you to know that we're running a 10 percent discount until the end of the week."
"Before we talk about your needs, I want to give you a heads-up that our prices are going up next week."
Far from creating mistrust, an "up-front" statement shows that you've got the prospect's best interests at heart. It also positions the discount as a temporary business condition that's entirely disconnected from the prospect's decision-making process.
The prospect now feels grateful to you for providing a "good deal" and feels free to factor the discount into the buying decision, without feeling pushed to decide right now.
GEOFFREY JAMES | Columnist
Geoffrey James was recently named a "Top 40 Social Selling Marketing Master" by Forbes, and his blog has won awards from the Society of American Business Editors and the American Society of Business Publication Editors. His writing has appeared in publications as diverse as Wired, Brandweek, and Men's Health, and he is the author of numerous books, including The Tao of Programming, Business Wisdom of the Electronic Elite, and, most recently, Business Without the Bullsh*t: 49 Secrets and Shortcuts You Need to Know.