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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.

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