Three Tips For Handling Discounts

At a Bosworth sales training in 2003, I was tasked with closing a deal without being able to provide a discount.  

I found this to be unrealistic.  A “no discounts” policy might work for a large, mature company with a unique product.  Or a company with such thin margins that any discount would materially affect the bottom line.  

But with many software or technology products, especially early-stage, margins are quite high, there are many competitors, and companies are fighting for market share, not for profitability.  There are also verticals (education, nonprofit) that are accustomed to discounts.  And some buyers are judged on their ability to reduce the price (particularly in certain markets outside the USA).

Here are three suggestions:  

1) Don’t Begin With A Discount.  Quote your price, proudly.  Explain why your solution is worth every penny.  Don’t lead with this:  “It’s $50/month but we can give you a discount.”

2) Reschedule The Discount Discussion:  When you are asked for a discount, take your time.  If you are early in the sales cycle, an appropriate response is something like, “I’d be willing to consider it after you’ve decided to select X as your solution.”   This is also a way to qualify the truly interested from the window shoppers.

3) Get Something In Return:  Never provide a discount of any kind without getting something in exchange.  Ask for their participation in a case study; a testimonial for use on your website; a statement in a press release; a referral to three colleagues; a multi-year commitment; or anything that would have value to your company.

Social Selling

I thought about buying LinkedIn stock when it went public, but not just because it’s a great recruiting tool.  

For me, LinkedIn was a great sales tool.  I found that I could use it to locate prospects, and research prospects in preparation for phone conferences.   I preached the use of LinkedIn to every salesperson I encountered.  

A recent Forbes article indicates others agree.  It refers to a report claiming that salespeople who use social media close more deals.

The article refers to the use of LinkedIn, Twitter, Facebook, Google+, and blogs.  Each has its own dynamics, and possible pitfalls.  Like any tool, to quote EC, “it’s in the way that you use it.”

I will post regularly here about how I’ve used LinkedIn to greatly improve the quality of sales prospecting and sales conversations.  The key is to upgrade from the basic free account to one of the paid premium accounts.  

The paid accounts allow you to cold email (“Inmail”) any Linkedin user who is open to accepting Inmails.  The paid plans also show more profiles in your search results, and provide full profiles of more LinkedIn users.   The account fees are a nominal investment for access to valuable business data.   

For more on the use of Inmails, and finding the very-hard-to-find using LinkedIn, stay tuned....

Memorial Day

General John A. Logan designated May 30, 1868 as ”a day for strewing with flowers or otherwise decorating the graves of comrades who died in defense of their country, and whose bodies now lie in almost every city, village, or hamlet churchyard in the land…It is the purpose of the commander-in-chief to inaugurate this observance with the hope that it will be kept from year to year while a survivor of the war remains to honor the memory of the departed.”

John Logan was beginning his second term as a Congressman from southern Illinois when the Civil War broke out.  He volunteered, and rose from colonel to major general.  He fought in eight major campaigns,and commanded the Union forces at the Battle of Atlanta.  He saved Raleigh, North Carolina from being burned by angry Union troops.

After the war, Logan returned to Congress.  In the 1870s he was twice elected to the U.S. Senate.  In 1884, he ran as Vice President with James G. Blaine.  

John A. Logan died at the age of 50 on December 26, 1886, in Washington D.C., where he lies buried in Soldier Cemetery.

Things Salespeople Say, Volume One

“Our product is really badass.”   

Hmmm.  Probably makes sense among college buddies.  But to a Fortune 1000 CIO?  Not so much.

“You’re going to love it.”   

Positive, optimistic statements are generally good.  This one is vague.  Stick to specific benefits.

“Gartner says we’re a Leader in their Magic Quadrant.”   

This is actually important to some prospective customers.  If I walk into a BMW dealership and the salesperson tells me Consumer Reports rated the 325i among the ten most reliable, that’s a fact that can positively influence me.   

Unless, of course, I’m really interested in the BMW because it looks great.  In that case, well, I kinda wish he’d told me  “This car is badass.”

So, first thing, seek to understand.  Then speak.  

The Three Things Sales Managers Should Do

I once read, and never forgot, that a manager only has to do three things for salespeople:  

Empower me.  Direct me.  Care about me.  

Let’s take them one at a time.

1) Empower me  

Give people the space and authority to do the job.  Managers should ask themselves:  am I letting the salesperson do the work?  Or am I stepping into his/her deals regularly, because if I don’t I’m afraid they will go south?

This can be more art than science.  And managers are ultimately responsible for the fate of a company’s sales opportunities.  But if you aren’t giving them a chance to fail, you aren’t giving them a chance.

(salespeople also need to ask prospective employers:  how much autonomy will I have, i.e. will you be calling all the pitches from the dugout?)

2) Direct me

Tell salespeople what you want.  Communicate your expectations.  This can be as simple as setting a quota, but if that’s all you ask for, that’s all you should get.  

If your direction is “just win baby,” you have no right to expect, for example, ethical play; teamwork; or any number of other possible deliverables.  

3) Care

Show your people that you care about them.  Don’t just say so (praise).  Do so.  Let me count the ways:  return emails promptly; take them to lunch; or just ask them how their weekend was.  

There’s no greater motivator than letting people know that you care about them.   Even the most financially rewarded, highest achievers want to feel valued.  

Study says top sales performers are less gregarious

An interesting look at the personality traits of successful salespeople...

"One of the most surprising differences between top salespeople and those ranking in the bottom one-third of performance is their level of gregariousness (preference for company and friendliness). Overall, top performers averaged 30 percent lower gregariousness than below average performers.http://www.heavyhitterwisdom.com/personality_study.asp

Handling the pricing objection

Handling communications from prospects on pricing is one of the hardest tasks for a salesperson, particularly where it begins with “your price is too high.”

Let’s look at a real situation --- an email reply from a prospect --- very early in the sales cycle:

“We think the Davinator is a pretty great tool.  But for it to be useful for us we must have the premium package and we think your current premium packages are quite expensive for our budget. For that reason we will hold off on using Davinator until further notice.”

In this scenario, you are a salesperson at a company that is struggling and needs every bit of revenue it can get.

What’s your best next step?

a) email offering a 5% discount

b) email and offer a 25% discount

c) email and tell her why the premium package is worth it

d) ask your manager if you can offer a discount

The answer is:  e) none of the above.

The goal here is to get this person on the phone.  Price should never be “discussed” in an email.  It’s an emotional issue for buyers and needs to be handled in a medium where you can have a real-time discussion involving pricing, needs, benefits and more.  If you can get them to meet in person, even better (if the price justifies the time/expense of the meeting).

So here’s your best next step:  reply back and indicate that you’d be glad to speak with her about a possible discount if she would have ten minutes next X-day at Y-time.  If she is truly interested in your product, and really wants a discount, she’ll agree to the call.  

How to handle that phone conversation?  Stay tuned....

Dilbert re: Sales

Dedication

"I don't know anything, I just talk about stuff."
  Professor Bill Pencak, Summer 1979