Why Do Customers Ask for Discounts?
Sometimes, a customer genuinely cannot afford your product at its ticketed price. This may be because they are a very small business whose budget is limited. If this is the case, ask them their idea of a fair price. If it’s reasonable, and you really like the customer, you can consider bringing the price down so that it’s in their range. Chances are, they’ll really appreciate the gesture and will remain loyal to you in the future. If their suggested price is just too low, however, it might not be realistic to try to work with them.
Some customers may only be asking for a discount because they’ve seen a similar product elsewhere which is cheaper. They may be trying to decide which product to go with, and testing the waters to see if you’ll “price match”. Be careful with these kinds of customers – they may not remain loyal to you in the future. If all they’re worried about is spending the smallest amount of money possible, they’re likely to drop you like a hot potato when they find someone willing to offer them a cheaper deal.
Occasionally, you’ll also get current customers asking for a discount because they aren’t happy with the product or service they’ve received from you. These kinds of requests have to be taken seriously, because you don’t want to lose their business to a competitor. However, rather than bend over backwards for them, try to solve their issues in a way which is mutually beneficial.
How to Negotiate a Fair Deal
If you are interested in working with the customer, you have to say “yes” to their discount request in a way which benefits the both of you. Don’t sell yourself short!
Rather than taking money off straight away, try to figure something out which still leaves you better off. For example, rather than offering them money off one product or service, see if you can persuade them to go with a package deal. Offering a discount if they buy multiple products could be a good idea: although you’re giving them a discount, you’re actually selling more than you would have in the first place.
Alternatively, if your company sells different types of products or services, try to find out if there are any that the customer currently sources from one of your competitors. Offering them a discount on those will take business from your competitors, and the customer is still getting a good deal.
Another way of doing it is to set up a loyalty scheme. That way, you’re offering them a discount, but only when they’ve used your product for a longer time and spent more money with you. This has the added bonus of making the customer more familiar with you, and wanting to stick with something that they know.
How to Let Them Down Gently
You can’t always offer a discount. Sometimes, the customer is simply asking for too much, or you’ve realised that your accounts can’t afford to take the hit. If you’ve decided to say “no”, make sure you let the customer down gently. After all, you don’t want to lose their business permanently.
The main thing is to make sure you come across as confident when you tell them you can’t give them a discount. You’ve obviously got a good reason – explain it in an easy to understand, concise way. For example, “I’m afraid we can’t give you that much money off – it wouldn’t be fair to our loyal customers who pay full price”, or if you’re in the mood to be honest, “Sorry, but we wouldn’t be in business if we charged that!” Alternatively, explain that your product is of a superior quality and that’s why you charge the price that you do. Demonstrating why your products are worth the money may be enough to convince them to spend it after all.
If your customer really can’t afford the product but you don’t want to lose them, offer them a similar product or service which is more within their price range. If their problem really is their budget, they might still be interested. On the other hand, if they get angry with you and try to argue you down, don’t fall into their trap. Some customers aren’t worth the hassle of trying to keep them. Direct them to a different company which offers a more affordable product, instead.
Be Proud of What You Do
The most important thing is to be proud of what you do and the products that you offer. Of course, it’s understandable that you want to keep your customers happy and loyal to you. However, constantly granting customers a discount can quickly run your profits into the ground. Not to mention, earning a reputation as a company that always gives you money off if you ask them is not a desirable one; you won’t be gaining the right sort of customers.
Before haggling, it’s essential that you have a solid understanding of your accounts, what it costs you to create and maintain your products, and how far you’re able to stretch your prices without compromising your business. However, if you follow the above techniques, you can’t go far wrong!