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January 03, 2012

Dealing with discounts - The Network Experience

Ask any salesman as to what is the most difficult thing to handle in a sales process he would promptly say objections. The best sales professionals are of the opinion that objections are curtains behind which opportunities for a sale are hiding, waiting to pop out. Open the curtain and the sale will pop out.

The one issue that crops up very frequently is discounts. Discounts are reductions on basic price of goods or services. Customers love discounts. Discounts offered by the salesman are not as attractive as those that are forcefully wrung out from the salesman.

So how to deal with discount? Let me cite an example from the company where I worked “Indian communications Network Limited”. Let us take the case of Pavan the salesman. Pavan has almost closed an order. Then comes the dreaded question “how much discount can you offer?” Pavan argues that the company does not offer any discount. But to no avail.  The customer wrings out 5% discount from the desperate for an order Pavan.

The customer is not satisfied. He tasted blood and wants more. He demands that Pavan offer him more discount. Pavan refuses. At this juncture the customer demands that he be allowed to meet Pavan’s boss. Pavan boss is the ASM (Area Sales Manager).

The customer meets the ASM and pulls the same stunt “How much more discount can you give?” This is where the ASM has to play the cards close to his chest. If he says no the sale might be lost. If the ASM is willing to negotiate more discount Pavan’s credibility as a salesman will be lost.

The ASM looks at the customer straight in the eye and says “We as a company have a policy not to offer any discount. Has Pavan offered you any discount?” The customer would be forced to accept that Pavan did offer him 5% discount. The ASM is shocked “Pavan should not have offered you the discount. I am afraid that we will have to reconsider the order”. The ASM is playing a very subtle mind game. In 9 out of 10 cases the customer is sold on the idea of the product and he would back track. The customer would plead with the ASM to let the 5% discount stay and retreat back to Pavan.

The ASM has delivered a very nice lesson of accountability and credibility to the customer. If more discount is given Pavan would carry less weight with the customer. By not offering any further discount and by saying that even 5% discount is not allowed the ASM is making the salesman have more value in the eyes of the customer. The customer would maintain healthy relationship and do business only with Pavan and not with the ASM. Any professional ASM would like the same – that the customer maintains a good relationship with the Salesman servicing the client or the territory. 

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