Discounting is for Dummies – Here’s Why And What to Do Instead | Sales Training

When you think of discounting your prices as a sales rep, you’re going to make less money. There’s still a lot of sales training out there saying you’re likely to get your customers attention with discounting. But this is probably one of the worst pricing strategies out there, and today I’m going to explain to you why with some Pricing Psychology 101.


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Let me tell you a story before we go into why you shouldn’t offer discounts (even if someone claims to have the perfect discounting formula).

When you go to the grocery store every once in a while, you’d be out the checkout and you just have to wait a very long time before you can checkout, because there’s probably another person in front of you who’s using all of these coupons.

But those people who use coupons, who are looking for the discounts, are conditioned only to buy when they get those discounts. And when there isn’t a discount they do not buy.

If you want to devalue your product or service and be the cheap solution, by all means, discount away.

But if you want to be the premier solution you shouldn’t discount.

A while back, I thought it’d be interesting to do a study, a test. And I did this in my past company. And after that study I stopped offering discounts all together.

Wondering what the test and experiment was?

Well, I had over thirty reps. I took half my reps and I said “Hey, our minimum price point is $3,600 dollars a year for our software, and you’re only allowed to charge $3,600 or more. In some cases, based on usage, it would be $10,000 a year, $50,000 a year, even $100,000+ a year”.

With the other group, I said “Hey, if people want a discount you can have some wiggle room. Don’t give them too much, but you can wiggle a little bit”.

And you know what we found out? The group that offered discounts closed less deals and made less revenue than the group that said “Hey, we’re not giving a discount”!

Think of sales like dating.

If you’re going after this guy or girl that you’re really attracted to, and they keep telling you “Yes” to everything, are you really going to be attracted to them?

Probably not for long, because you’re going to get whatever you want. But the moment they tell you “No” you’re like “Whoa, I can’t have what I want!”
You’re going to keep going after that chase.

And the moment you tell your potential customers, when they ask for a discount, “No” – they’re more likely to sign up.

I kid you not, when you say “No” they’re more likely to sign up.

So here’s what I want you to do, I’m going to give you a few steps.

First, use the word No. It’s that simple. When someone says “Hey, can I have a discount?” you should say “No, I can’t, because this is what it’s going to cost to give you the quality of the work or product that you’re looking for. If you’re looking for a lower solution or you’re willing to take less features, sure we can talk about a different scale contract, or different pricing. But if this is what you’re looking for, these are the results you want, this is a price you’re going to have to pay.”

So by using the word No and explaining it, you’re going to get a lot less pushback.

Two, even if they say “I got to talk to my boss, or I got to get permission, this is my budget.” You should always say “No problem, if you want I wouldn’t mind jumping on the phone with them as well and explaining why this product or service costs as much, what they’re going to get, and all the value they’re going to get in exchange for this money.”

Three, instead of talking about pricing, you should talk about benefits.

It’s not about how much they’re paying. It’s about what are they getting.

In sales, stop selling features, stop selling your product or service.

Start selling the end goal. Whatever they’re expecting by signing up, that’s what you should be selling.

In general, when it comes to sales, those are the three things you need to follow.

And if you follow them you’re going to be much better off.

You won’t have to discount, and you’ll find that more people are be willing to sign a contract with you and your company.

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