Do You Offer Discounts to Get Orders?

Should you offer discounts or lower your prices to get orders? Many salespeople and business owners think it's the only way to compete. If our prices are high, we'll lose orders. But is that really true?

When I ask salespeople, "What can we do to increase sales?" the first answer is always to reduce pricing or offer discounts. Let's explore two key questions:

1. Can you really get more orders by giving discounts? Or is it just an excuse?

2. Do you know the damage caused by discounting?

The Real Impact of Discounts

1. Discount is a Drug

Discounts are like a drug. Once you start offering them, it becomes an easy way to get sales, and worse, your customers get used to them. They might stop buying from you if you discontinue discounts. Learn how to sell without discounts, and you'll never have to rely on them.

2. You Are Saying Your Product is Less Worthy

Offering discounts signals that your product is less worthy. It shows a lack of confidence in your product, and your customers feel the same. Sometimes, offering discounts when the customer hasn't even made up their mind can actually put them off.

3. How Much Cash is Left on the Table?

You might not realize how much money you're leaving on the table when you discount. It could be thousands, lakhs, or crores. The price of your fear is high.

?The Main Point

4. How Much Extra Sales Required?

How much extra work will you need to do to make up for the discount? Let's look at the price discounting matrix:

- If your current profit margin is 30% and you offer a 10% discount, you need to sell 50% more to earn the same profit. That's one and a half times more! While giving discounts is easy, selling one and a half times more is difficult. Consider the marketing costs to attract 50% more customers.

?What to Do Instead

1. Increase the Value of Your Product

Offer something for a limited period that won't cost you much but will have a high perceived value for the customer, like an extra warranty or service contract.

2. Offer a Premium Option

Introduce a high-priced premium option. This high price acts as an anchor, making consumers feel they made a rational decision to buy the lower-priced product.

3. Sell on Value, Not Price

Sell a solution, not just a product. Learning the sales process and techniques like SPIN selling is crucial.

There are many strategies to increase both profits and sales. While discounting can boost sales, it's very harmful to your profits. Why leave money on the table?

By focusing on value and using these strategies, you can boost your sales without relying on discounts.

Hope you won't offer discounts to anyone now.