Our target clients and customers have been trained to negotiate price and to expect a discount. We are the ones who have been training them.
We’ve done things like padding our pricing by the amount of our anticipated request for a discount, making it easy to concede. We have made these concessions time and time again.
We have taught our clients that the first price that they receive is never the price that they should pay, even when we have sold the value that we create and not the price.
We’ve gotten the call from our dream client telling us that they love us, they love our solutions, and that they desperately want to choose us because they know we will produce the best result for them. Then they tell us that when they analyzed the spreadsheet we were the highest priced of the three finalists and to win the business we will have to sharpen our pencils. We want the business; we cave to the request, and strip out the profit that would have allowed us to serve them and to produce the result that they need.
If you were to survey 100 people, none would believe that the best offering is the cheapest. No one believes that you can have fast, perfect, and cheapest all rolled up into the same offering. But then salespeople who should know better sell this fairy tale and chase the bottom, insisting that their dream client can have fast, perfect, and cheapest if they would give them their business. Instead, they would better serve their prospective client by doing the heavy lifting of understanding their constraints and helping them to make the right investments in the results that they need.
All of this has led to our clients and customers having been taught to negotiate and to ask for discounts. Why then are we disappointed when we get to the end of the sales process and we are asked for a discount?
The Dance and the Disservice
All of this is now part of the dance between buyers and sellers. But we do our clients a disservice. The effort and energy we expend negotiating price and discounting would be better spent on helping our clients make a better investment in the results they need. We would serve them better by helping them to understand what is possible and selling the real value we can create together.
In my experience, most of the companies I know that are focused on price instead of value creation get what they bargained for, namely low price instead of value creation. I have also found that it is true that the focus on price has resulted in many companies underinvesting in the results that they need, not overpaying for the services; they are paying too much for the poor result that they are getting, but investing too little to get the result that they need.
We as salespeople do our clients a disservice by not focusing on creating more value and making it worth investing more to obtain. They don’t need us to get them a price concession, they need us to help them invest more and obtain greater results. They need us to provide them with the analysis, the rationale, and the proof that makes investing more for a greater result easier for them to obtain.
We should discontinue this training program.
What behaviors do we as salespeople exhibit that suggest to our clients that they should ask for a discount?
Why have we as buyers been trained to ask for discounts?
What does it say about the value that has been created that a discount is being requested? Is it really that the price isn’t connected to the value created, or is it simply custom and behavior training?
How do refuse to discount and still win your opportunity?
How much more value is created for the client by the discount being given? Is the discount the best that we can offer them?