Sales Negotiation: How to Handle Discount Requests
In short
- Before answering a discount request, find out why they are asking and whether price is the only thing left.
- Trade; do not give. Every concession should be matched by something from the buyer.
- Changing the scope is better than changing the price.
- Know your walk-away point before the conversation starts.
When a buyer asks for a discount, do not answer with a number: ask what is behind the request, confirm that price is the last open issue, and then offer a trade rather than a cut. A discount given freely is a price that was never real. A discount exchanged for something is a deal.
Ask three things first
- "Help me understand what is driving that." A fixed budget, a cheaper quote and a habit of asking are three different problems.
- "If we can agree on price, are we ready to go ahead?" Never negotiate price while other issues are open, or you will negotiate it twice.
- "Who else needs to approve this?" Do not make your best offer to someone who has to take it upstairs to be negotiated again.
What to trade instead of price
| They want | You can ask for |
|---|
| A lower price | A longer term, or payment up front |
| A lower price | A smaller scope or fewer users to start |
| A lower price | A start date this month |
| Extra services included | A case study or reference once results are in |
| Flexible terms | A larger initial order |
The wording: "I can look at that if we can agree a twelve-month term. Would that work?" The word "if" does the work. It makes the concession conditional and tells the buyer that your price has reasons.
Five rules
- Know your walk-away point. Decide it beforehand, when you are calm.
- Never concede twice in a row. If you gave something, the next move is theirs.
- Make concessions smaller each time. A shrinking pattern signals you are near the limit.
- Give a reason. "Because you are starting this month" is a reason. A cut with no reason invites the next request.
- Put it in writing the same day, with what was agreed on both sides.
Common buyer tactics, and calm responses
- "Your competitor is cheaper." "They may be. Can we compare what each includes, so you are choosing on the same basis?"
- "Is that your best price?" "It is the right price for what we discussed. If the budget is fixed, we can look at what to change in the scope."
- "We need a decision on price today." "I want to get this right more than fast. What is driving today?"
- Silence. Let it sit. Do not fill it with a discount.
When to walk away
If the only way to win is a price at which you cannot deliver well, losing is the better outcome. Customers bought on the lowest price tend to stay only until someone else is lower. Say it kindly: "I do not think we can do this properly at that figure, and I would rather tell you now."
Negotiation starts earlier than you think
The strength of your position at the end is set by the discovery at the beginning: how clearly the buyer stated what the problem costs. If that is weak, see SPIN selling questions. The first response to "too much" is in how to respond to a price objection, and the closing question in how to close a sales call.
Crack Sales shows a company's own terms and pricing answers from its Sales Brain during a live call, so a rep under pressure offers what the company actually allows. It is free to use and starts after a 15-minute intro call: book a demo.
Frequently asked questions
How do you respond when a customer asks for a discount?
Ask what is driving the request and whether price is the last open issue. Then offer a trade, such as a lower price in return for a longer term or a smaller scope, rather than a straight reduction.
What can you offer instead of a discount?
A reduced scope, phased delivery, different payment terms, or extra value such as onboarding help, each in exchange for something from the buyer like a longer term or an earlier start.
When should you walk away from a negotiation?
When the price required to win is one at which you cannot deliver properly. Decide that point before the negotiation begins.
Try it on your own calls
Crack Sales is free to use on your own sales calls, and it starts after a 15-minute intro call. Book a demo.
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