Don’t discount your biz

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!” More

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Don’t discount your biz

Posted 4/2/12

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.” 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 some key discount-diverting questions, and when to ask them (note the questions are phrased as if you are the one asking):

• 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?”

• 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?”

• 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?” 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?”

• To learn more about your client’s buying process: “Where will the budget come from for this? Who can give this final approval?”

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. •


Daniel Kehrer can be reached at

editor@bizbest.com.

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