10 Questions to Defuse Discount Requests

Today, more than ever before, small business owners of all types are hearing four potentially dangerous words from clients and customers: “I need a discount!”

What do you do then? Many businesses already have an established yes or no answer. But if your past response to discount requests has been to fire back a firm “no” or simply offer a price break, there’s definitely a better way, says Robert Sobel, a customer loyalty expert and co-author of the book “Power Questions” (Willey, 2012). By simply asking the right questions, you can gain valuable intelligence on why the customer is seeking a discount, and thus have ammunition that helps you preserve your profitability.

There are four types of discount seekers. The first are in genuine financial trouble and really might need a break. Others simply want to negotiate the lowest price on absolutely everything, and some just like to feel like you’ve given them a deal. A fourth type of discount seeker likes to complain about how much things cost, no matter what.

Asking the right questions helps you discover what kind of discount seeker you are dealing with, and how to respond. Here are the 10 key discount-diverting questions, and when to ask them (note the questions are phrased as if you are the one asking):

  1. To kick start the conversation: “Before I respond, would you mind if I asked you a couple of questions so I can better understand your request?”
  2. To dig deeper: “Occasionally a client requests a discount, and I find I am able to be more helpful if I understand why they’re asking for one. Can you tell me why you think the price is too high and a reduction is warranted?”
  3. To size up your competition: “I know you are talking to other service providers about this project. Do you feel my price is dramatically out of line with the market?”
  4. To say “no” while identifying possible terms for a positive negotiation: “I am able to reduce the price when the scope and breadth of the proposal are also cut back. Would you like me to prepare an option for you that would do that?”
  5. Or you might also say, “We are able to reduce price in exchange for terms and conditions that help lower our risk and long-term cost of doing business. Would you like me to develop a proposal for a long-term supply arrangement with built-in discounts for guaranteed volume levels?”
  6. To learn more about your client’s buying process: “Where will the budget come from for this? Who can give this final approval?”
  7. To accentuate the value you are offering and clarify what is most important to the client: “I’m not sure we had a thorough discussion about the benefits you expect from this. Can we review those, as you see them?” Or you might ask, “What parts of this proposal are most important to you? Which aspects of it do you find less valuable?”
  8. To differentiate yourself from the competition: “Would you mind if I briefly reviewed several aspects of my proposal that I think represent value above and beyond what our competitors offer? I’m not sure I articulated these very well.”
  9. To tie your proposal to your client’s higher-level goals: “Can we review one more time what your goals are here? What are you hoping to accomplish?”
  10. To go toe to toe: “Do you give your own customers discounts?” And if they say “Yes,” you respond, “That’s why you need me.” And if they say “No,” you respond, “So why should I?”

The goal, of course, is to preserve and strengthen the customer relationship —assuming it’s a customer you’d like to keep. If you’ve priced your services properly, you probably cannot afford to discount. But if you simply say ‘No,’ the customer might leave and never return.

By using a question approach, you can delve deeper into the situation and discover the customer’s true needs. You might find another way to show them the value they want. In the long term that will be viewed much more positively than a one-time discount and is a better option than refusing the request out of hand.

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Filed Under: ManagingSmartSalesSavvy

About the Author: Daniel Kehrer, Founder and Chief Content Officer of BizBest Media, is a senior-level leader in digital media, content development and online marketing with special expertise in startups, SMB, social media and generating traffic, engagement and leads. He holds an MBA from UCLA/Anderson and is a passionate entrepreneur (started 4 businesses), syndicated columnist, blogger, thought leader and author of 7 business and financial books.

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