Insights & Tips

Already a subscriber? Login

Become a subscriber and unlock an information arsenal focused on making your pricing efforts more effective.

Discounting Isn’t the Problem…It’s the Solution

You know that the price targets have been clearly communicated to the sales team. So why are so many deals coming in under target? It must be that you have a big problem with discounting on your hands.

A discount is the easy way out for a sales person.  They can just lower the price and save themselves from having to do any of the heavy lifting, right?

But discounting isn’t really the problem. A discount is actually the medicine that salespeople use to cure many ailments:

  • A discount quickly differentiates your product from the competition.
  • A discount can help justify value when the true value isn’t understood.
  • A discount changes the argument when you’re trying to overcome objections.
  • A discount gets customers moving faster when you need to hit quota.

Let’s face it. A discount is a very effective solution—it solves many problems quickly and has a proven track record of working successfully. If you’re feeling a little uneasy about a deal, popping a quick discount pill will likely have you feeling better in no time.

But as effective as the discount pill is, it’s often only treating the symptoms of a much larger disease. Now, the “disease” could be that the salesperson is just horrible at his or her job and discounting is their only effective sales tool. Thankfully, some new hiring practices can cure that.

But often, the real “disease” is much bigger and more complicated. To come up with a cure, your diagnosis needs to begin by asking what’s causing the symptoms that the discount pill is being used to treat. Here are few questions to start:

  • Are your price targets segmented to reflect the true differences between customers?
  • Do you have value-based messages that effectively communicate why you’re worth it?
  • Does the sales team truly believe in the value and benefit of the products that they’re selling?
  • Is the sales team empowered to push back when a customer demands a discount?
  • Are sales people incentivized to hit price targets or to just hit revenue goals?

If you can start answering some of these questions, you’ll be much closer to finding the real cause of the “disease” that’s been ailing your sales team.

Get Immediate Access To Everything In The PricingBrew Journal

Related Resources

  • Using Pricing Analysis to Drive More Growth

    Pricing analysis capabilities are usually only focused on pricing. But pricing isn't the only thing the analytical processes and underlying data can be used for. In this on-demand webinar, you will learn how answering other powerful questions can increase your impact and internal profile.

    View This Webinar
  • The Pricing Practitioner's Primer on B2B Sales

    To be most effective in B2B environments, pricing professionals need to learn as much as they can about their sales function. In this on-demand webinar, learn more about aspects of sales people and processes that can affect pricing performance.

    View This Webinar
  • Getting to the Right Number

    In this Expert Interview, Walter Paczkowski shares his perspectives on the challenges and opportunities he's identified in his work using advanced quantitative techniques to set better prices.

    View This Interview
  • Generating Cost-to-Serve Automagically

    Creating accurate cost-to-serve estimates can be more difficult than people anticipate. In this tutorial, learn how to reduce the time and effort required to estimate the indirect costs of serving different customers.

    View This Tutorial