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Why Giving Discounts is Hurting Your Business More Than You Think

Sales Professor Ramez Helou

I was at a meeting talking with a general manager of a large food distributor.

He was telling me how his customers leave after they find the same item cheaper by just a few pennies.

He was telling me how there is just no more loyalty and how they have to give discounts for their customers to buy.

Now, do you feel the same applies to you and your business?

I told them, well, if you have a commodity product that is easily replaceable then you need to play this price war thing I said but, let me ask you a question; do you have some customers who are not going for the cheaper options and buying from you?

He said yes; so, I asked why do they buy from you and not from those cheaper options?

He said, well they like our service, innovation, customer support etc.

I said, well I’m glad to hear that your problem isn’t really that your prices are higher, but that your problem is that your people don’t know how to build value for what they’re selling.

Now, it’s even worse if you’ve given your team discounts as a tool to fight with as this tool becomes the only thing they know how to use.

Why? 

Because it’s the easiest thing to do that sounds familiar.

See, I find this problem with many businesses where the sales leaders have a trading mentality; it’s not right or wrong, it’s just that times have evolved given the age of Alibaba and Amazon.

You can almost compare anything online, find cheaper options and click to buy.

See, if salespeople are not adding value in the sales process to justify a premium then their jobs will be eliminated eventually.

I’ll share with you a recent story.

I wanted to buy a camera for my house to monitor my baby.

One day I pass by a local supermarket, Carrefour, and I get introduced to this new surveillance camera.

I take my phone and Google the same model and end up visiting a website offering me the same item for about $30 less.

I show it to the sales rep and say, hey, why should I buy this from the store when I can buy it cheaper online?

His answer was really great.

He goes, sir, you’re free to buy it from anywhere you want, but the only thing that I can tell you is that this website you’re looking at is not a recognized website by our company as we only sell through authorized retailers in the UAE.

The prices are fixed and anything that is popular will be copied and of course, you risk the option of accidentally buying a fake and ineffective camera.

Now, if you want to use this for your baby, the safer option is to buy it here.

Now, what do you think I did? You guessed it, I bought it from Carrefour.

You can see how he was able to remind me of the objective of my purchase; value.

And voila, no discounts at all.

This is Sales Professor Ramez Helou, Founder of The Academy for Sales Excellence and keynote speaker.

If you’ve enjoyed this video, share it with others, and until next time, Sell More, Sell Faster, and Sell Profitably. 

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