The Biggest Mistake a Sales Professional can make
If you are in sales of any capacity then you have seen this happen many times, and hopefully it made you cringe a tad bit each time: a colleague closing a deal by discounting heavily.
That right there is a major red flag for B2B sales professionals. As long as your offerings are priced logically based on what the market has shown to value the solution at, discounting below that means you have not done a good job at showing the client the value and hence the return on their investment.
The latest research by Vantage Partners shows that granting discounts is something the majority of sales professionals do with 48% of them discounting between 10%-24%. The biggest impact such discounting has is that it creates a new normal price – 50% of the time discounting leads to a new normal price within 1 month to 1 year.
That is detrimental for a business in every which way and will hurt the sales team the most in the long run!
If you notice yourself having to win a deal on price then it’s time to start building more value before discussing price. The key is effectively identifying the pain points during the discovery meeting/call so that you have the information needed to first see if you actually have a solution for them, and then position it effectively to the client. Do your research into the company, industry and competitors before the discovery call – this will make it possible for you to ask smart questions that allow you to understand the problems the client is facing. A quick test to see if you are on the right track would be to see who is doing the most talking during the discovery – if it’s you then you will probably end up using price to win the deal. Remember: They are talking to you because they need a problem to be solved and if you can show them you have the answer to that problem then price will not be a hurdle for you.
If you want a lucrative career in this space then you have to burn some calories to leave this nasty practice in your past and start becoming an expert at solutions based sales!
Source for graph and data: The Downside of Discounts. (2015). Retrieved May 10, 2015
This article was originally posted on Sales Talent Agency's blog
B.com, DBF
2yAsad, thanks for sharing!
Executive Chairman, Head of Brokering, Insurance/Risk Management and Commercial Broker
7yI agree 100 percent, so bang on!! Agreed great article and timely
Sales Enablement | SaaS Sales | | Avid Reader | Student of Life
7yAn insightful article Asad Zaman! Thank you for sharing this. I echo with your sentiments there... Sales is not just pushing a product by offering heavy discounts, rather it is identifying the pain point and then offering a solution. There's always a difference between "price" and "value" and if sales professionals are able to convey the "value" then "price" topics can be managed in a better way.
CEO & Broker of Record
7y10 - 24%, wow people must sell things with ALOT of margin. Why be in business if your giving 24% off.