This filled my inbox with a few questions about why sales teams always want to discount.
I put down a few ideas that might be helpful.
One big reason your sales team wants to discount is incentives.
Does the sales team get rewarded on profit?
That’s an incentive that will limit discounting.
Does the same team get rewarded on revenue?
That will incentivize discounts because more sales is better.
Lack of Market Awareness:
Your sales team should be incredibly close to the market.
That’s their job.
But one area where the sales team seems to suffer is in understanding the total market.
This is a marketing challenge as much as a sales challenge.
Because too many marketing teams aren’t doing the necessary research to find out what alternatives the customer is considering, the value the customer needs and wants, and to get a feel for where the price really should be.
A lot of times discounts come because your sales team might need training on overcoming objections, negotiations, or selling based on value.
Too much sales training is more rote training built around tactical execution of the sales role.
Too little sales training focuses on teaching salespeople how to sell strategically.
Selling with a Commodity Mindset:
All of these things build to a mindset challenge that I call “Selling with the Commodity Mindset”.
What does this mean?
This means that the sale is transactional.
The salesperson isn’t considering value.
The salesperson isn’t considering the importance of the sale to the buyer and to the company.
It is a mindset that creates the thinking that “all sales are good sales”.
A final one…
Your business entertains the idea:
This is a holistic issue.
It starts often with a lack of a clear strategy.
- No definition of success.
- No effective targeting.
- Your position, not clear.
Your business might not have invested in your brand, meaning you don’t have preference, pricing power, or brand equity.
You might not have the research necessary to understand what your market really needs, values, and how you can differentiate yourself.
You probably are wandering from sale to sale without even knowing it.
My question to you is: How are you going to tackle the destructive power of discounts in your business?