"Discounts and Buyer Behavior - Where's The Logic?"

Everybody wants a deal. Even if the client is dead set on your product or service, you may very well have to provide a perceived price concession just to seal the deal. As a sales pro, you’ve been there before, haven’t you? Well here’s my question: when it comes to comparing costs and gaining price concessions, why does the buyer often favor the cost and/or concession when it is framed as a “discount” even though your effective price, after the discount, may still be higher than your competitor’s?

I have run into many situations where when it was time to consider price, the buyer compared only the discounts, not the list price or rack rate with the discount. Doesn’t it make perfect sense to do the latter and is it not foolish to do only the former? Look at marketing collateral everywhere – “discount!”, “discount!”, “discount!” is sometimes all that is printed. Why is the buyer in love with discounts, and not actual prices? I don’t get it.

I even try to put myself in the buyer’s shoes, I am one from time to time, and I still cannot develop the love affair with the discount in my choice of products and services. But it is always there! Back in my sales shoes, I experimented once and left discounts out of the cost page of my proposals and showed only actual pricing. I wanted to be simple and direct with my prospects in the belief that such an approach would improve my success. My win rate declined. Lesson learned there: always show your costs as a discount to something! And be prepared to bump the discount up a few points just to seal the deal. Everybody wants a deal.

In a perfect world, us sales pro’s would always be selling value and our buyers would always be buying value, thereby negating the need to spend much time on pricing and discounts. But it’s always there to consider. I just simply marvel over the attention a discount gets above and beyond that for the effective net price. Everybody wants a deal – “hey, I just got 30% off!” “Off of WHAT?!” I ask!!