More Discounting Methods

May 8, 2006


By: Matt Michel


DISCOUNTING BY CONSIDERATION
Sometimes people want to buy from you and truly cannot afford to pay your price. It’s not possible to subtract from the offering, to take something out of the package to reduce the price. You’ve got room to discount if you want to make the sale, and you want the sale. You might even be willing to take the job at cost, if needed, so that you can keep a crew busy.

Regardless, you’ve put a proposal on the table and you want to reduce the price. How? How can you reduce it and keep your credibility?

The answer is to ask for some form of consideration. The buyer must do something to justify the price reduction. For example, the buyer could offer a testimonial and endorsement. He could agree to let you use his name in a mailing to his neighbors. In other words, the buyer helps you get more business in return for a discount.

DISCOUNTING BY PERMISSION
Anyone who has bought a car from a dealer has probably encountered discounting by permission. The salesperson negotiates with you. You ask for a lower price and the salesperson says he has to run it by the sales manager. The salesperson puts himself in a position without power. He can’t make the deal. He can only present it on your behalf, incidentally placing himself on your side, against the big bad sales manager.

Usually, the salesperson will try to get a commitment from you before he presents your offer. He’ll say something like, “If I can get the sales manager to accept this offer for you, are you willing to drive a new car home tonight?” If you agree, he’s just closed the sale. Sometimes, depending on the salesperson’s assessment of you or the sales manager’s goals, the salesperson might return with a compromise offer, leading to a counter and repeat of the cycle.

Obviously, for in-home sales, the salesperson cannot run over to see the sales manager. Instead, he calls the shop.

I used the term “sales manager,” but it could be any higher authority (e.g., the president, owner, a committee, etc.). The point is to give the power to the higher authority. This allows a salesperson to discount, if desired, without risking his credibility or integrity. In fact, the use of the higher authority positions the salesperson as the buyer’s advocate.


Source: Comanche Marketing. Reprinted by permission.
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Copyright © 2004 Matt Michel

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