cso high

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Discounting Is A Drug
How to kick the habit now
Think about this...  

Habits are neither good nor bad - they are simply conditioned behavior. When discounting becomes a habit, it's like a drug. If anyone in your organization is habitually discounting, kick the habit now - before it's too late.
 
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ChuckThink about it this way...

 
 Like any other drug, discounting becomes habitual. It becomes the first choice for achieving a sales high. Taking "a quick hit off of the corporate margin" can bring immediate relief from the stress brought on by a sales manager who is demanding results.
 
It's always a temporary fix

 

But the high is only temporary. Because there is so little profit in the sale, more sales will be necessary to sustain the financial health of the organization. The pressure for more sales will often cause the discounter to turn to their drug of choice again (discounting) and the downward cycle continues.

 

Also, as with other addictions, the hits bring less and less satisfaction - especially when the salesperson is compensated on margin.

 

There is a better, healthier sales high when we close the sale on value, rather than price. The cure is education. Sales professionals need to be coached on how to sell on value rather than price. Don't try to stop discounting "cold turkey" unless you know how to behave differently. Plenty of training is available. Ask for - and accept - the help you need.

 

Who are the "discount users" in your organization?

 

Are some of your salespeople using discounting? Without some type of intervention they will likely continue using until you cannot afford them any longer. At that point you will part company and they will go to another organization where they can begin discounting again.

 

Come to think about it, maybe they were users at the company where they worked before you hired them. They are hard to detect.

 

Break the cycle; teach them how to sell on value.

 
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Sooner or Later You Will Sell On Value

How long can you wait?
 

There is a limit to how much discounting you can do. Cut your price to close a sale and the customer will expect you to cut your price again on the next one. How long will it be before you cannot cut the price any deeper?

 

At that point you will need to sell on value in order to keep from losing your customer to a competitor with an even lower price. All you may be able to do at that point is to preserve your current discounted price. That's right, implementing value-added selling may only help you preserve that pitiful, low-margin price point your customer enjoys. Or it could help restore your prices...

 

Why not implement a value approach now while you still have a respectable price with a viable margin?

 

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 Help Is Available!

 
Give me a day with your sales team and I will help them kick the habit of discounting. You will see immediate changes in their behavior. Is it worth investing the equivalent of a week's pay for each of your salespeople to have them selling more profitably? 
 
Give me two days with your people and they will begin reversing the damage done from their previous use of discounting. Yes, the damage can be reversed as your salespeople build on their capabilities to change their relationships with their customers.
 
If I'm not the right trainer for your team I will help you find the right one. Need help now? I have limited availability and may not be able to help you so I will lead you to someone else who can. Like a different approach? Let me help you find the right person for your situation.
 
Whatever you do, seek out the help your organization needs
and do it now.
 
 
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Vistage/TEC Chairs: Consider passing this along to your Members who are having trouble maintaining their price points. Healthier Member companies make for healthier Members!
 
Teach Others!
 

Chuck Reaves
21 Associates