By Frank Visgatis, President & Chief Operating Officer, CustomerCentric Selling® – The Sales Training Company
When we conduct sales training workshops, our goal is equal parts skills transfer and equal parts behavior modification. One of the behaviors we work to condition out of salespeople through a combination of education and training is the tendency to default to percentage discounts in an attempt to close business. In fact, one new client commented as part of our discovery discussions, “My salespeople think that negotiating means discounting until the prospect says ‘yes’.”
When we peel back the layers, we find that the most common reason for discounting is a lack of understanding of value, both on the part of the prospect and on the part of the salesperson. In other words, not only has the salesperson been unable to get the prospect to articulate the value through deliberate measurement of their current operating environment, in many cases the salesperson is unaware of the value themselves.
Without a clear, mutual understanding of the value being provided, salespeople typically default to price when negotiating. In fact, when squeezed on price, many salespeople default to the question:
“Where do we need to be?”
Those are the six most expensive words in business. When a salesperson asks that question in a negotiation:
- They have effectively acknowledged that they also believe a discount will be necessary to close the business.
- They have implied they have the power to grant that discount.
- The prospect rarely if ever provides a reasonable response.
The prospect sets the bar far lower than what they are willing to pay and then the salesperson has to fight tooth and nail for every point of margin in between.