High Five

A tip for you.  Never discount in chunks divisble by five.

Think about it.  Most time you talk about discounts you go up in chunks of five per cent.  Five per cent, ten per cent, fifteen per cent – it’s just the way people tend to think.    If you knew the true impact that discounting has on your bottom line, you’d fight for every one per cent. When you take into account the fixed cost structures your business has, hanging onto an additional one per cent can have a transformational effect on your bottom line.

Here’s five tips for you when someone asks for a discount: -

1).  When someone asks for discount, ask for something back.  For example – faster payment, a referral letter or a top-up of the order which makes it more efficient to handle logistically.  Consider it a trade-off, you want something from me, so what are you offering in exchange?

2).  Distract discounting discussions by trying to remove something from your offer.  ” You want an additional five per cent, sure we can achieve that by replacing X with Y or removing X from the deal”.

3).  Probe, probe, probe your buyer.  If you have something that you know is a good fit for a specific reason for their requirement, hang on in there.  Keep re-questioning their key reason for the purchase, in particular re-capping what they want from a potential supplier – this could be your saving grace on defending your pricing position.

4) Discount in blocks of one per cent.  It gives a far greater impression that you’ve got your pricing in tune, from the start and that you need profits for the long term, to support the customer.

5)  Have things that are of low value to you, but perceived high value to the customer up your sleeve.  This again comes back to questioning.  It’s amazing what small things sometimes swing deals, because it is of perceived high value to the customer.  Perhaps it’s throwing something in for a consumer or a priority line into your customer support centre.  Remember, people are time and attention poor, what can you do to help.