You may say that one of the best ways keeping the customer from going to a competitor is answering to the discount requests. This is quite understandable. However, do you think it’s going to be a one-time-thing? Will the future orders’ price reduction be out of the question? Or do you believe that you can keep them at discounted prices?
I had done this in the early years of my career. Say the name is Claire. We had started with Claire well. First orders were perfect business; no request for anything. About a year later, I myself offered a reduction of that order as a gesture. Unfortunately I was unaware that I triggered sth bad for the future. As you can tell, she accepted it right away with appreciation.
I will cut the story short and skip to the good part; after a year of discounted quotes she was amazingly comfortable with asking for more and more reductions, credit notes and cuts; what’s more she felt she had the right to buy from me at lower prices than my other customers.
I had to end this relation by giving my standard list price knowing she wouldn’t accept; and guess what? she went to my competitor. This is not the worst part. The worst part is that she buys from them at the same price as my list price. I think she took it as an insult or sth. This gave me a big lesson which I would never have had anytime and anywhere from anyone else.
With this lesson taken and digested, I went on with my life and worked seriously on it to prevent such a case from happening again.
Don’t ever be the one to offer a discount
If you feel that you’ll win the prospect with a reasonable discount, do it. If that is not the point, never start the negotiation with pricing. It makes you just an ordinary supplier that offers an average product with nothing distinctive.
It’s just for that single order
Make sure that the discount you accept is for the one in question and give a reason why you’re doing it for once. When people don’t know the reason, you just give them the right to ask for further demands for future trade.
Place a condition on the discount
In order not to give a submissive impression you can set reasonable conditions like revising the payment terms, incoterms or increasing the order size etc.
You don’t have to reduce the price for all items
If the order has more than one item you can choose the more profitable ones, arrange the discount accordingly, and offer the discount amount from the total value so you don’t have to explain the details.
Be careful about the numbers
If there is a 5% discount in your mind, don’t do that! When you round the numbers like 5% or €500 they will feel like you can do more as it’ll sound like a number that just comes out of your mouth without thinking about. On the other hand, when you offer 3,5% / 6.2% or €340 / €620, they will most probably hesitate to ask for more.
Last but not least; a big discount will also ruin the deal. When you make for example a large discount of €5,000 which accounts for 15% of the total value, the buyer will think they are being ripped off and you know the end of the story.
Have you experienced similar incidents in your business life? Do you often have to deal with discount requests? How did you manage it and what lessons did you get? You can leave a comment below.