What to Do When Customers Ask You For a Discount — Jeff Shore

How do you handle customer requests for discounts when you’re looking to drive revenue? Today on the Atlanta Small Business Show, we’re pleased to welcome back Jeff Shore, sales trainer, keynote speaker, author, and founder of Shore Consulting, to walk us through dealing with the discount oriented customer. 

Transcription:

Jim Fitzpatrick:
So Jeff, thank you so much for joining us once again, on the show.

Jeff Shore:
Jim, always good spending time with you. Let’s have some fun.

Jim Fitzpatrick:
Sure. Well, what is it about some customers that causes them to ask for discounts, and they do it right away, right up front, they don’t even want to hear the feature presentation, “What can I get off on the car?”

Jeff Shore:
Yeah, I think so many people in your audience have had spent some time in some sort of sales training. Well, your buyer goes through buyer training and they go through buyer training through their own experiences. And in their experiences, they’re used to this, maybe they’re shopping for a car and they haven’t bought one for five years and they don’t really understand what the environment is, but they walk through the door of the business or the showroom, whatever it is. And nobody’s trained them, other than their own experience. And so, they don’t know what they’re supposed to do. So, “I think I’m supposed to ask for a discount.” I would call it very, very normal buying behavior-

Jim Fitzpatrick:
Early and often.

Jeff Shore:
It would be almost unusual if they didn’t.

Jim Fitzpatrick:
Right. That’s right. Yeah. That’s a good point. For those customers that come into a place of business and say, “Whose turn is it? I’m buying a car. Let’s do business.” Those are the concerning ones. You find out, maybe their credit’s not good or they’re going to put you off until another day or what have you. But actually, when something, ask for a discount or looks for a discount, that’s usually a buying sign. It can be a good thing, right?

Jeff Shore:
Well, listen, I think you’re right. I don’t think most people just say, “Hey, listen, it’s a dealership or it’s a showroom”, whatever it is that, “I know we’re not on the market, but let’s go see what’s going on.” That would be a rare customer out there. So sure. If they’re asking for terms, it’s usually a pretty good sign.

Jim Fitzpatrick:
That’s right. Someone asks about specials or promotions or incentives. Do we answer that question right away?

Jeff Shore:
I wouldn’t. And the reason that I wouldn’t is that, and this is general, this is just a general statement, but it is going to apply to this buyer. The earlier we talk about terms, whether it’s price, whether it’s payments, whether it’s promotions or discounts or whatever. The earlier we talk about terms, the harder it is to get a sale. And the reason is that, when people make decisions, they make them out of their emotional core. And when you get into anything technical at all, it doesn’t even have to be a discounted. It might just be getting questions about payments. When you get into those detailed analytical conversations, it takes them away. They become unmoored from the emotional impulse, and that does zero good. So even if you do have a promotion going on or a special of some kind, you’ve got to find a way to defer that. The earlier you talk about terms, the less likely it is that you’re going to get an agreement.

Jim Fitzpatrick:
That’s right. And sometimes the question of discounts come up when the salesperson, and forgive me salespeople, because I know there’s a lot of great ones out there, but sometimes they come up, when there’s the lack of a sales presentation. I worked with a great salesperson, one time, in my automotive career. And they said, “What I like to do is, I like to greet the customer and ask them some qualifying questions in terms of the right vehicle, that’s right for them and what’s going to fit their needs.” And then he said, “When I land on the vehicle, I say, now here’s what I’m going to do, Mr and Mrs customer. I’m going to go through the entire vehicle. And if you have any questions, please hold them to the end and I’ll be happy to answer any of them, because I want you to leave just as informed as you can be. How does that sound for you?”
And then they’re like, “Yep. Okay.” And they’re ready for the presentation. So that way they’re not asking through the whole presentation, how much can I get off? But my point about this is that, that salesperson had a program and a system and a presentation that he or she wanted to make on a particular product. And so many of us are maybe not equipped, or we’re not ready to give that presentation. We think, “Well, we’ll just come in when the customer comes in. We’ll just be there to answer questions that they might have.” Well, the lack of a strong presentation, guess what one of the questions are going to be? “How much can I get off on this item?”

Jeff Shore:
It’s a really good point. I think sometimes salespeople, weaker salespeople can look at the customer and saying, “Oh, they’re just trying to do a money grab here and all people want is discounts.” And I would look at it and say, “Well, go back and evaluate your presentation. Did you give them this huge, wide opening where nobody knew what to say. Then they go into their buyer bag of tricks and do what they’re supposed to do?” But for a salesperson who is in control of the conversation, who has that rapport building time early on, who builds that trust, who sets the agenda. Who lets people know how this is going to work, says “I’m in charge and we’re going to have some fun here.” You’re far less likely to get that question. So you’ll never get the question, but we’ve got to figure out a way to defer. But I think you’re right, Jim. We have to start by being self evaluative on this. Am I opening the gate that would cause them to walk through and start rummaging around for discounts?

Jim Fitzpatrick:
That’s right. What’s a good comeback or a go-to that you’ve used in the past? When somebody early on in the presentation, or in the meet and greeted or what have you in the first five minutes of meeting somebody, where they go right in on, “How much can I get off on this?” Whatever the product is, or what a discount are you giving today? What’s a good go-to that you have found, that allows you to address the question, because you don’t want to be rude, but then also get right back to your presentation?

Jeff Shore:
Right. You’re right. You don’t want to be rude. You don’t want to look scared, but you don’t want to lose control. And so in that case, I’m going to say to that customer, “It’s a great question. Appreciate you asking. And if you decide to purchase today, we want to make it as easy as we can for you to do that. But none of that’s going to matter until we have the right product for you. So let’s go take a look at, we have. And then in just a few minutes, we’ll talk about how we can make it easy for you to buy it.” So I’m-

Jim Fitzpatrick:
I love it. You know what? You never used the word discounts in there.

Jeff Shore:
No, I did not. And I don’t want to. I don’t like the word discount very much, but I do want them to know, like you say, we want to be respectful about it. Even when I said, “In just a few minutes.” You’re on record. We’re going to talk about it. We’re just not going to talk about it yet. So let’s see if we have what you’re looking for. And then, in just a few minutes, we’ll be happy to talk about how we make it easy for you to buy it.

Jim Fitzpatrick:
It’s such a good point, because I’ve seen so many scenarios that you just brought up where, a salesperson will end up discounting or talking about discounts or incentives, on a product that doesn’t even fit the needs of that customer at the time or that prospect.

Jeff Shore:
Drives me crazy.

Jim Fitzpatrick:
And you’re like, “What are you even doing right now? Do you even know that this product fits that customer’s needs?” Whatever it is that you’re selling them. So you’re exactly right. Let’s put the needs of that customer up front. And that’s not the discount. I think the other thing about asking a question about a discount is, a question is not an objection. It wasn’t an objection you’ve got to overcome. It was simply a question. They didn’t say the discount wasn’t enough. They didn’t say the price was too high. They simply asked, “What kind of discount can I expect?” So don’t let that throw you off. Don’t look at it as an objection, because it is not an objection. Continue with your process. Do you think that discounts can sometimes confuse the customer?

Jeff Shore:
Oh absolutely. No doubt about it. Look, here’s a term that I coined many years ago that gives us a clue to the way that a buyer’s going to make a decision. And the term is, value purity. And I define it this way. People will only buy when they believe that the price is both fair and final. That’s value purity. They believe they’ll buy when they believe that the price is fair and final. So if you go to a grocery store, you need a loaf of bread. You look at the shelves there, “Here’s the loaf of bread, here’s the price. I don’t think they’re going to go any lower than that. I think it’s a fair price. I’m going to buy it without any concern whatsoever.” But if I believe that there is this looming discount or there’s a negotiation opportunity or whatever it is, it becomes very, very difficult for me to make a decision.
And so, when we lead with discounts or when we bring up discounts early on or we answer the discount question early on, even if we don’t have discounts. As soon as we get into that conversation, the customer has no sense of certainty on that, that the price is both fair and final. That’s the idea. We talked about this the last time that you and I talked, but the last time I bought a car, I had two different salespeople said, “Well, we’re already selling this car at a loss.” And first of all, it lost all credibility to me each time—

Jim Fitzpatrick:
Total credibility.

Jeff Shore:
It’s like, “Stop, please retire that line.”

Jim Fitzpatrick:
Just don’t even. Don’t ever say that.

Jeff Shore:
Exactly. But the other thing that I thought is, “Well, if you’re already selling at a loss, then maybe you’re going to sell it at more of a loss. And so, what difference does it make?”

Jim Fitzpatrick:
That’s right. Lets keep going.

Jeff Shore:
So we got to keep that in mind here that, the early introduction of terms, especially as it relates to discounts, it’s all it’ll do, is confuse the buyer. I don’t think we should ever lead with any kind of promotion.

Jim Fitzpatrick:
So what do you do with that customer that just persists, because we’ve just given our audience that’s listening to us today, some really good tips and some go-to’s, but what do you do with that customer that just persists, that just doesn’t let up. Like you said, they went to the customer training school and they just keep digging, “I hear what you’re saying, but how much off? And I’m a discount buyer and I’m not going to pay top dollar. And I got to know the discount before I go another minute further.” What do you do with those people?

Jeff Shore:
Well, I say close them. I would say to that customer, “Look, it sounds like you are very, very serious about buying this. Let’s fill out a purchase agreement right now and we’ll put the discount on the purchase agreement that you want and let’s see what happens. I don’t think we’re going to fly right now in this environment, but let’s write up a purchase agreement.” And if I’ve got a customer, who’s like, “Well, we haven’t seen the car yet.” It’s like, you know what? You’re right. We should do that first. Let’s go see the car, and then we’ll do this. But I say close them. I say, let them know, you want to talk about terms? I want to talk about a contract.

Jim Fitzpatrick:
Right. What’s interesting about that too is, and you know this from your experience out there, if somebody were to say to you, comes in and they’re a prospect and the customer says, “What kind of a discount can I expect?” “Well, let’s try to stay on the car.” And the customer says, “Look, I’m not even going to look at a car unless you can tell me that you’re going to give me $3,000 off. Okay.” And that salesperson says, “You got yourself a deal, give you three grand off”. Now, what do you think that customer’s thinking? That was way too easy. It’s not going to be three. Now it’s going to be six grand, right? So even though you think you’re trying to make it easy for the customer to cut right through the chase, you just blew up that whole process.

Jeff Shore:
Well, it’s the same thing if somebody calls you on the phone and says, “What are your discounts? What are your deals? What are your promotion?” If you’re thinking, “Well, if I don’t answer the question, the guy’s not going to buy.” And I would argue that if you do answer the question, the guy’s not going to buy.

Jim Fitzpatrick:
I would agree with you. That’s right.

Jeff Shore:
That’s all he’s trying to do is eliminate you anyway. So what is the point? But let’s face it. Whether it’s a car or a home or set of golf clubs, these are emotion based purchases. And we have to keep this in mind that, we support the decision up here, but we make the decision here. And if we don’t reach into that emotion, if we don’t get to that point where the gut is saying, “I want this.” Then all you can do is make sure you’re giving away more than the next guy. That’s not sales.

Jim Fitzpatrick:
No, that’s not. You’re just a price adjuster at that point in time.

Jeff Shore:
Yeah. That’s all it is.

Jim Fitzpatrick:
And so, if you do have some kind of promotion going on and there is an opportunity to come off of the price, when is the right time to bring it up?

Jeff Shore:
After you know that there is an emotional connection to the product. So that’s the idea. And even there, I’m not sure that I would just drop it all out there. But if I looked at it and I had a promotion, I said, “I love it when people fall in love with whatever, a car or home or golf clubs, whatever it is. And I have to tell you, if we could help you to get that under this, or this, month to month or whatever. How would that sit with you?” And so, if I’ve got something that I can bring it up, but honestly, I don’t know that this is anything that really has to happen, until we are deep into the terms discussion, but it has to happen after the emotion. It cannot happen until there’s an emotional connection. And so, if I can separate that out as a salesperson and say, “I know we still have to talk about the price and terms over here, but did we find the right car? Let’s just start there first.”
And that moment is critical. I’m not asking him to buy it. I’m just asking him, “Did we find the right vehicle for you? Did we find the right home for you? Did we find the right golf clubs for you?” That moment is so important, because when the customer says, “Yes”, they’re not saying yes to you, they’re saying yes to themselves. Now, when they’re going to go in and start the negotiation or any discussions that we’re going to have here, now they have to look at it and say, “If I don’t buy, you know what that means? I didn’t buy the right car.” And they know deep down that’s not a good idea. So we’ve got to get to that point. And I would just argue that, having that moment of saying, did we find the right car, home, golf clubs? That moment is really critical that you can build your sales presentation around it.

Jim Fitzpatrick:
That’s right. And that customer is going to be much more apt to take maybe a smaller promotion or smaller discount on that item-

Jeff Shore:
100%. No doubt about it.

Jim Fitzpatrick:
Now that they see themselves not being able to live without that product. So it’s not all about the discount. It’s really all about the product that they’re buying, which it should be, the discounts… Nobody should either drive home in a new car that doesn’t fit their needs to go, “Hey honey, look at this great discount that I just got on this two door car for our six member family. But look at the discount.”

Jeff Shore:
There’s no such thing as a great deal on a product you don’t love very much.

Jim Fitzpatrick:
That’s right. You got a bad deal. No question about it. Jeff Shore, sales trainer, keynote speaker, author, founder of Shore Consulting. We’ll show the information on the screen here, as to how you can hear more. So Jeff, thank you so much for your time. I really appreciate it. These are very unique times out there, that salespeople are faced with different challenges. This being one of them, what kind of a discount can I get? Even in light of the fact that there’s a shortage of so many products out there. People still want that discount. Right?

Jeff Shore:
It’s true. Yeah. Always good spending time with you, Jim.

Jim Fitzpatrick:
Great. Thank you.

The Atlanta Small Business Network, from start-up to success, we are your go-to resource for small business news, expert advice, information, and event coverage.