Discounting Your Way Into Sales Oblivion

By Jim Meisenheimer
Posted Monday, January 31, 2005

I don't even like saying the word d---------g. I have literally obliterated it from my dictionary with a black marking pen. I'll bite my tongue until it bleeds, before I say the word.

Earlier this week Bernadette, my wife, and I went shopping . . . something I love to do. Just kidding! We were looking for a 3-piece plant stand for our deck. We found one in a catalog and went to the store to check it out.

Bernadette always asks the sales person if he can do better on his price. You'd be surprised how much you can save just by asking.

Sidebar! The word ASK is the most powerful word in a sales person's vocabulary.

Back to what happened. We debated over two different pieces and made a decision. The piece we didn't select had a 30% discount tag on it.

According to the sales person the 3-piece set we decided on was not on sale. Our sad faces didn't seem to move him. He said he could get into trouble for giving us a discount.

Another sidebar. The GNP of the United States would increase by a staggering amount (Probably hundreds of billions) if all salespeople got into trouble with their organizations for giving discounts.

Back to the store. The salesman said the display unit was the only one available. Bernadette asked for a discount if we took the floor display.

He caved in and finally said I'll give you a 10% discount.

Here's the math: The list price was $178. 10% equals $17.80.

He could have said, after doing the math, I'll take $15 off because it's a display unit. The $15 is 8.4%. We would have been thrilled. And you can bet the ranch, we would not have reached for a calculator to see what the percentage discount was.

In my opinion dollars off always sounds more impressive than a percent discount.

Because it was a display item the salesperson had to remove some things before he could bring the 3-pieces to the cash register. Bernadette inspected each piece. They were painted black and one had a sizable and noticeable scratch on it.

Bernadette once again asked if he do any better on the price because of the damage on the 3-piece plant stand.

It's time for more math. Remember he first offered us a 10% discount.

If he increased the 10% discount to 12% the increase is 20%.

If he increased the 10% discount to 14% the increase is 40%.

If he increased the 10% discount to 16% the increase is 60%.

If he increased the 10% discount to 18% the increase is 80%.

If he increased the 10% discount to 20% the increase is 100%.

Without any hesitation he said I'll give you 20% off.

He doubled his original discount. It doesn't sound like much but in reality it is. The plant stand list price was $178. For other products, perhaps even yours, it could have been $1,788, $17,888, $178,888, or even $1,788,888.

Don't be too quick to give discounts, especially big ones. Use your head and do the math before you offer additional price concessions.

Forget about defending your price and do your best to explain your value.

Here are a few more things to keep in mind:

If you offer genuine value - don't give it away, charge for it.

If you absolutely must offer a price incentive, never start with round numbers. Make sure there's a decimal point included.

For example, any professional sales representative offering 5%, 10%, 15%, 20% off etc. should have to listen to seven straight hours of Lawrence Welk Music. If you must offer a concession try 3.9%, 8.9%, 13.6%, 19.3% etc. Once you calculated the discount % convert it to dollars because it always sounds like more.

Never offer a price concession without getting something in return - NEVER.

Finally, a small disclaimer. Please don't think I'm violating my pricing strategy when you see me offer special incentives for my products. My speaking and consulting fees are at list price and I seldom offer any discounts.

I have negotiated very good pricing for all my products. And I'm happy to offer you a price break from time to time if it helps you to invest in your self-development. See the end of this letter.

In a nutshell - anybody can offer a discount.

If profitability is the applause of a happy customer you should be raising your prices, especially if your customers are happy.

About the Author
Jim Meisenheimer is the creator of No-Brainer Sales Training. His sales techniques and selling skills focus on practical ideas that get immediate results. You can discover all his secrets by visiting his website: (http://www.meisenheimer.com)