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etailinsights eCommerce Data and Sales Blog

Sales Hack: Discounting - Give to Gain

By Darren Pierce on Jul 27, 2016 9:02:29 AM

etailinsights eCommerce Data and Sales Blog

Sales Hack: Discounting - Give to Gain

posted by Darren Pierce

 


"Let me go to talk to my manager."

Discounting sales hackVomit. No one likes dealing with car salespeople. No one. Even Donald Trump doesn’t like “doing deals” with a car salespeople. And, most of us in SaaS Sales hate being compared to those bait-and-switchers who call their job “sales.” It isn’t really “sales,” it’s more akin to someone applying water torture upon us. We are there to buy a car. They aren’t ‘selling’ it to us, rather they are in our way of making the purchase. Move please.

 

My father recently bought a car, and he used the (NC) State Employees Credit Union to handle the purchase. They did all the work, purchased the car for him, then brought it to his house. He never had to speak with a car salesperson, and got the car he wanted at a very good price. He also avoided hearing the dreaded statement, “Let me go talk to my manager.”

 

We can learn a lot about how not to do it from bad salespeople. For example, imagine you are on a used car lot. You find the car you want so you ask the price.

 

“$14,999,” replies the salesman.

 

“Wow that’s steep, can you do better?” You inquire.

 

“Yes, how about $12,000?” - he replies.

 

Halt. What do you think? How do you feel upon hearing this?

 

Most of you immediately become skeptical that the car is worth anything. You’ve lost complete trust in this salesman. Most of you didn’t think: “Wow, I just got a great deal, I’ve got to buy this immediately.” Rather you thought of all the reasons you shouldn’t buy this car. It’s Psychology 101: if a price is dropped (give) without a buyer having to do anything in return (gain), they get cold feet.

 

This is why car dealers force their salespeople to say, “Let me talk to my manager.” It’s not ideal, but it does insert a pause for them, and it’s better than immediately dropping price.

 

We can use this example to learn how to discount properly while still retaining trust and the perception of value in our offering. We call this “Give to Gain,” and we must use it in our SaaS Sales Conversations when negotiating price.

 

Sales Hack: Discounting: Give to Gain

If you’ve done your part, established Rule of 3s, earned their trust, diagnosed pain, and prescribed your solution... Then, you’ve already done the hard part. Price negotiation should be easy and fun.

 

Based on the personality profile of your buyer, there may be a price negotiation. Don’t panic. This is normal and actually a good sign, a buying signal.

 

But if you want to close the deal, you cannot easily drop the price right away; even if you have discounting authority. In order to give a discount, you must gain something in return. This is critical in order to a) retain perceived value of your solution and b) retain trust from your buyer.

 

You see, if you didn’t offer the best price in the first place then why would they trust you?  Also, if they receive a discount too easily, they begin to question the value of what they are purchasing.

 

Good examples of things you might gain in order to give for a discount:

1. I’m up against my monthly goal, do you think you could sign our contract before Friday?” (also helpful to uncover WHO will be signing)

2. “When you have success using our solution, would you mind providing a video testimonial for our website?” (Note “WHEN” not “IF”)

3. “When you have success using our solution, would you mind serving as a reference for future purchasers?” (I don’t like this one, seems cheesy)

4. “I see on your website that you have a partnership with [insert prospect name here], would you be willing to make an introduction for me?”

What you gain is merely gravy. This process isn’t about the gain of a testimonial or referral. It’s mainly about retaining trust and the perception of value in your SaaS offering for online retailers.

 

Bonus Hack: If you have discount authority, don’t tell them you will get back to them with a better price. People hate this and it reminds them of buying a car. Go ahead and own the process and give to gain right away. Also, if your authority is 10%, don’t discount 5% or 10%, go for 3% or 7%. You will have more success. Try it and let me know how it goes, and as always please share your own thoughts or SaaS Sales Hacks in the comments below.

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Written by Darren Pierce

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