There are many reasons why you can give a discount to prospects and clients. It can help build a relationship between businesses, or fast-track deals. However, you cannot give a discount every time they ask for it. Having the right strategy will boost its benefits both for you and your client.
Giving the discount on the early phase of negotiation is a loss on your part. This means you will not be able to ask something in return. However, if you give the discount in the later part, you can also benefit from it since you already know their needs and what they want for their business.
Disadvantages of Giving Discounts
- Your product is perceived as cheap and of lesser value. If a business would want to increase their sales, they should be willing to invest in a better service. Like in the case of social media digital marketing and digital social media marketing strategy, most companies would be willing to pay more because they will have better returns in the long run.
- The deal focuses more on the cost rather than the value you can give to them. Instead of seeing their potential growth they will look more into the price of the service. The prospect most likely will get interested not because of the value you offer but because it costs less. Like in the case of digital marketing, they will not appreciate the scope and services offered, if they focus more on the cost. If the client insists, you may have to reduce services such as cutting on content or link building strategies to meet their budget.
- Lesser profit. This is one of the most obvious disadvantages of giving a discount. You surely do not want to be paid less for your work.
Responding To a Customer
Responding to these is not that easy. It requires expertise to be able to satisfy your prospect or client without affecting your profit. Here are some tips on how to effectively respond when a customer asks for discounts.
- It is early to discuss discounts if you don’t know your prospect’s situation and needs yet. You can first offer to talk about it until you come up with a deal that will satisfy both parties. This way, you will know what services to give and what is not applicable to this prospect.
- Identifying whether your prospect has a budget or in financial difficulty will help you give the most appropriate response. If the prospect is capable of paying but just wanted to get a discount, you can firmly say no. And, there is still a chance that they will grab your offer since they are capable to pay. While if they are financially down, then you might have to make a decision to let them go.
- Offer a win-win situation to your prospect. You can ask them to extend their contract or increase their orders along with the discount. By doing this, both you and your prospect will end up happy.
- If you are in the middle of a sales conversation and the prospect asks for a discount, this means that they are interested in the offer. At this stage, don’t give them a discount yet because it’s too early. Giving it to them will only lower the value of your product and will make you look too eager to close the deal.
Discounts are part of every business. Knowing how to use them for your business will not only benefit your customer but your company as well.
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