Seem like strong words? Good! Keep reading, this post is for you.
If you need a discount to get someone to say yes, then you haven’t done your job as a salesperson.
And if your team is discounting to close end of month, quarter or year strong- then you haven’t done your job as a sales leader.
I can easily get pretty fired up about this (just ask any of the salespeople and teams I have coached). Why? Because discounting hurts trust, credibility, and it’s a dangerous and lazy shortcut to get someone to buy.
And as some data suggests, it doesn’t work for growth. In fact, it seems that discounting increases churn for SaaS companies and reduce LTV.
Still think discounting is only costing you X%?
How to kill discounts.
Sell on value. Are these words somewhere in your sales strategy? In your job description?
What does it mean to sell on value? Value based selling has nothing to do with the price of your solution. Value is in the eye of the beholder. It has everything to do with the cost of the buyer’s problem. Why is the status quo not good enough? What happens if things stay as they are?
What does it take? There are 12 measurable and predictable attributes necessary for a salesperson to execute on a ‘sell on value’ strategy.
- Value Buyer.
- Comfortable Discussing Money.
- High Threshold for Money.
- Attempt to Sell on Value.
- Sales Process Supports Selling Value.
- Learns Why Prospects Will Buy.
- Doesn’t Need Approval.
- Asks Great Questions.
- Asks Enough Questions.
- Doesn’t Make Assumptions.
- Quickly Develops Rapport.
- Not Compelled to Quote.
What if you have already offered the discount? Now what?
After sending a proposal and quote to a prospect with a discount, a client forwarded me this email reply;
“Thank you for your offer which we have reviewed carefully. We’re happy. We’d like to be delighted. A couple of tweaks would make us life-long friends.
Please consider extending X% discount to the full program. We want this to be a long association and Y% going in feels a little like half the apple.
We never did discuss how we could mitigate our non-productive ramp-up time. We propose an immediate start and a <30 day extension> contract renewal.
If this works for you, we will complete the billing information promptly.”
Needless to say my coaching client was frustrated. He was planning to spend more time negotiating and trying to get them to see the value. Except as we debriefed and I asked him, ”Why are they doing any of this anyway? What happens if they do nothing?” he didn’t know.
He was so busy trying to prove value, he never stopped to ask what value was to them- why do anything at all? On top of that, he wasn’t talking with the decision maker, but through the influencer who hadn’t been successful at getting the decision maker involved.
We strategized what he needed to do next (pick up the phone) and how to have the following uncomfortable conversation with his influencer.
“John, I appreciate all the work you have put into getting this to happen. It seems like this is something that will make your job easier.” <8 second pause> “I wish I could tell you something other than what I am about to, but it doesn’t look like this is going to happen. I wanted to tell you before I told <decision maker>.”
While my client was on the phone his point of contact left the room and got his boss, brought him into the conference room and the deal was done, signed (and paid) the next day.
If you have to discount to get the deal, start over- you missed the important parts and haven't done your job.
Do you want to debrief, strategize, and practice the discounting conversation happening in your pipeline right now? Join me on the next #livesaleslab.