Discounting is for Dummies - Here’s Why And What to Do Instead | Sales Training
When you think of discounting your prices as a sales rep, you're going to make less money. There's still a lot of sales training out there saying you’re likely to get your customers attention with discounting. But this is probably one of the worst pricing strategies out there, and today I'm going to explain to you why with some Pricing Psychology 101.
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RESOURCES & LINKS:
“You Are Pricing Your Product WRONG! How to Determine Optimal Price for Profit” (video): • You Are Pricing Your P...
“The RIGHT Way to Drive More Online Sales By Discounting Your Products” (video): • The RIGHT Way to Drive...
“9 Ways to Make Your Expensive Product Look like a Total Steal” (article): neilpatel.com/...
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Let me tell you a story before we go into why you shouldn't offer discounts (even if someone claims to have the perfect discounting formula).
When you go to the grocery store every once in a while, you'd be out the checkout and you just have to wait a very long time before you can checkout, because there's probably another person in front of you who's using all of these coupons.
But those people who use coupons, who are looking for the discounts, are conditioned only to buy when they get those discounts. And when there isn't a discount they do not buy.
If you want to devalue your product or service and be the cheap solution, by all means, discount away.
But if you want to be the premier solution you shouldn't discount.
A while back, I thought it'd be interesting to do a study, a test. And I did this in my past company. And after that study I stopped offering discounts all together.
Wondering what the test and experiment was?
Well, I had over thirty reps. I took half my reps and I said "Hey, our minimum price point is $3,600 dollars a year for our software, and you're only allowed to charge $3,600 or more. In some cases, based on usage, it would be $10,000 a year, $50,000 a year, even $100,000+ a year".
With the other group, I said "Hey, if people want a discount you can have some wiggle room. Don't give them too much, but you can wiggle a little bit".
And you know what we found out? The group that offered discounts closed less deals and made less revenue than the group that said "Hey, we're not giving a discount"!
Think of sales like dating.
If you're going after this guy or girl that you're really attracted to, and they keep telling you "Yes" to everything, are you really going to be attracted to them?
Probably not for long, because you're going to get whatever you want. But the moment they tell you "No" you're like "Whoa, I can't have what I want!"
You're going to keep going after that chase.
And the moment you tell your potential customers, when they ask for a discount, "No" - they're more likely to sign up.
I kid you not, when you say "No" they're more likely to sign up.
So here's what I want you to do, I'm going to give you a few steps.
First, use the word No. It's that simple. When someone says "Hey, can I have a discount?" you should say "No, I can't, because this is what it's going to cost to give you the quality of the work or product that you're looking for. If you're looking for a lower solution or you're willing to take less features, sure we can talk about a different scale contract, or different pricing. But if this is what you're looking for, these are the results you want, this is a price you're going to have to pay."
So by using the word No and explaining it, you're going to get a lot less pushback.
Two, even if they say "I got to talk to my boss, or I got to get permission, this is my budget." You should always say "No problem, if you want I wouldn't mind jumping on the phone with them as well and explaining why this product or service costs as much, what they're going to get, and all the value they're going to get in exchange for this money."
Three, instead of talking about pricing, you should talk about benefits.
It's not about how much they're paying. It's about what are they getting.
In sales, stop selling features, stop selling your product or service.
Start selling the end goal. Whatever they're expecting by signing up, that's what you should be selling.
In general, when it comes to sales, those are the three things you need to follow.
And if you follow them you're going to be much better off.
You won't have to discount, and you'll find that more people are be willing to sign a contract with you and your company.
.
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Пікірлер: 194
Has anyone ever asked you for a discount before, and you actually said ‘Yes’ to them?
@narayana3609
5 жыл бұрын
Yes
@manavsingh7378
5 жыл бұрын
No
@bhanarambhanwariya2142
5 жыл бұрын
Yes
@toprelease6439
5 жыл бұрын
Nice dress sir
@sonnyjsinishajanicijevic5436
5 жыл бұрын
Yes, many times :)
This is crazy. You keep generating such quality content every now and then. So thankful you are on KZread
@neilpatel
5 жыл бұрын
Thanks so much!
Oh my God. Neil. Whatever I'm doing wrong right now, you seem to be understanding me and giving me the best advice. Thank you so much.
@neilpatel
5 жыл бұрын
That is great, David! Happy to hear that!
I 100% agree Neil, thank you for the confirmation, I have the same experience (after doing it wrong in the beginning believing that discounts were great, they aren't)!
@neilpatel
5 жыл бұрын
Great!
Every Single Day; It's Crazy Times!
Thank you Neil...very sound advice...makes so much sense!
@neilpatel
5 жыл бұрын
You're very welcome!
Thanks so much for this video Neil. This really helps me with pricing for my agency services.
@neilpatel
5 жыл бұрын
You are very welcome!
Neil this was really interesting, thanks!! Similarly, I observe clients are a lot more engaged and excited about the service when they are paying for it, rather then when an employer offers to pay. I find this to be true 90% of the time.
@neilpatel
5 жыл бұрын
Very interesting!
You're always true. I started with $0 trial, $1 trial or $19.95 trial for the same product and like you said $0 & $1 never did well.
@neilpatel
5 жыл бұрын
Very interesting
Yes
Its all about improving your offer!
It is one of the great advice I have ever hear No then explain the benefits of the services that been provided Thanks alot for that great advice
@neilpatel
5 жыл бұрын
You're welcome!
True words Neil...I always say I would love to see "Porsche" advertising with sales discounts...when you discount you devalue yourself! 🙏✋
@neilpatel
5 жыл бұрын
Thanks!
Instead of giving discounts try something unique in your product then people will more likely to give money💵.
@neilpatel
5 жыл бұрын
Absolutely!
Huge huge huge fan.
@neilpatel
5 жыл бұрын
Thanks!!
Yes. I have a worldwide audience and when someone emails me from a country where they're making the equivalent of $30 USD a month, I'm likely to offer a discount as it's important to me to make my unique courses on anxiety available to people regardless of income. I'd love to hear your thoughts on this.
@neilpatel
5 жыл бұрын
I think in that case it is worth testing
@wisdomofanxiety
5 жыл бұрын
Thank you for your response,@@neilpatel. I appreciate it.
Yeah, This is true .. Sir, i have faced these things several times. But now instead of offering Discount !! I am offering Quality of Work Now !!
@neilpatel
5 жыл бұрын
Nice!!
Discounts work well for affiliate products, leads to much higher sales. I think its important for the business to factor the discount in mind when setting the price.
@neilpatel
5 жыл бұрын
Thanks for sharing :)
yes
Great advice! Thank you Neil :D
@neilpatel
5 жыл бұрын
You're welcome, Ryan!
Hello Neil, You're really amazing. A couple of days ago, One of my clients requested me to design their organization's website mockups and asked for a reasonable price. At first, he wasn't satisfied with the budget and work that'll be done. Later, I offered him a complete package with website development at higher price. Now he is satisfied and has a contract with me. I love to Care his business not charging over price. Again thanks for your valuable strategies.
@neilpatel
5 жыл бұрын
That is great! Good job :)
@ashrafdev
5 жыл бұрын
@@neilpatel Thanks, Buddy!
Yes, I did it many times
Great video as always brother.
@neilpatel
5 жыл бұрын
Thank you my friend!
Thank you! I needed to hear that from an experienced man like you...
@neilpatel
5 жыл бұрын
You're welcome!
Great video as always!
@neilpatel
5 жыл бұрын
Thank you!
Hi Neil... Thanks for this video and I think it is important for the business to factor the discount in mind when setting the price. I asked you for creating a video about backlinking so I'm excited about the video...
@neilpatel
5 жыл бұрын
You are very welcome!
Finally, Neil moving Blogging/SEO to Digital Marketing ;)
@neilpatel
5 жыл бұрын
Glad you liked it ;)
Hii Neil I am a regular viewer of your videos and I have learned blogging from you.
@neilpatel
5 жыл бұрын
Awesome!
This reminds me of ebooks and Amazon publishing a little bit. Majority of writers publish their writing and then when there are no sales they get frustrated and offer a discount or give their work away for free. That means when people who downloaded the free literature sees another ebook you wrote instead of paying they'll wait you out for a freebie.
@neilpatel
5 жыл бұрын
Interesting, James
Yes.
Really great video
@neilpatel
5 жыл бұрын
Thank you!
but what about the early bird price? is it good when the product is not yet finished?
@neilpatel
5 жыл бұрын
That's worth testing
Good one Neil! But in India this trick hardly work😁
@neilpatel
5 жыл бұрын
Why do you think that?
@BinZ1
5 жыл бұрын
@@neilpatel Neil, Indians live for bargaining and paying less for the same thing than the next guy. I've seen business owners keep a higher price and then giving a permanent discount of 25 - 30% just to satisfy the "discount" mentality. I feel that's unethical. I've also seen that Indians don't bargain at malls or big box stores but will bargain with individual sellers and small & medium businesses all the time.
@mohithrathore6424
5 жыл бұрын
@@BinZ1 i agree!
Marketing and dating tips ✨😎
Damn Right Neil and Good Morning
@neilpatel
5 жыл бұрын
Good morning ;)
I run 10% off a slow ebay, Im not budging with the ebay discount until april. I just started a store that will not have discounts. I will just increase handling time with shipping to compensate.
@neilpatel
5 жыл бұрын
Interesting strategy
Yes :(
make more video like this Patel!!!
@neilpatel
5 жыл бұрын
Thanks a lot for the feedback!
You are the best dude in KZread
@neilpatel
5 жыл бұрын
Thank you, Sam!
SUBSCRIBED!
@neilpatel
5 жыл бұрын
Thank you!
Congrats On 300K 💓
@neilpatel
5 жыл бұрын
Thank you!!
Hello, Neil thank you for sharing those valuable tips. And please add Lithuania country to ubersugest. Because there are Estonia which is even smaller then my country. Thank you!
@neilpatel
5 жыл бұрын
Thanks, Gedas! Eventually it will be added :)
Before watching this I'll additional say, rather than offering a discount, I offer additional benefits for same price. Now I'll see what YOU say :)
@neilpatel
5 жыл бұрын
That's a good strategy ;)
Nice right to the point! Thx!
@neilpatel
5 жыл бұрын
You're welcome!
Hi Neil, I loved watching your videos and learned a lot. Can you please recommend best Free video editing software. Thanks 😊
@neilpatel
5 жыл бұрын
You are very welcome!
Hello sir, I have been watching your videos since almost a year now and you are one of the people I look up to. I am going through a problem and was hoping you can help me guide a bit. I have a family-runned jewellery store and we've been known for the trust and quality for over 35 years now. I recently started paying more attention to the business as I am now of that age to do so. I know where we lack and why we aren't on the top list of jewellery stores but I don't know where to start from. I think our main problem is that we aren't fully targetting the right audience. I handle the social media accounts for our biz but I'm just lost where should I start from. I hope you can help me out with this problem. :)
@neilpatel
5 жыл бұрын
Focus a lot on local SEO. That is really important for physical stores. From there, see what's working for other jewelry stores on social and build up your strategy based on their successes.
@rheasoni2740
5 жыл бұрын
@@neilpatel thank you so much
Hi Neil, thanks a lot for your great content videos. I am a regular watcher of your content. I have a query, regarding my business line. I am an art entrepreneur and I started with original art and art prints for home decor. Do you think this video logic stands for luxury business too? Original Artworks come under home/Space decor which is not a necessity but a luxury (an add on) to customer’s life. So would not discounting help to bring in more customers? Please suggest.
@neilpatel
4 жыл бұрын
If you'e currently not getting the ROI or sales you need, setting lower prices or creating discounts may be a useful tactic for you. I think a lot of companies are afraid to offer discounts because they're worried about brand image. This is not the case. We live in a time where products which were once considered luxury, are now often offered at lower or discounted prices.
Hey neil, would this work in a price sensitive market like India?
@neilpatel
5 жыл бұрын
I believe so, yes
@nidhived9338
5 жыл бұрын
@@neilpatel Cool, thanks for the reply.
I work at a department store and recently had a customer come in and not one to pay the regular price of an item $30. I was able to drop down the price and get him to buy it for around 20$. Am I better off not making the sale or giving it away at a cheaper price?
@desubtilizer
5 жыл бұрын
Depends on the margin of the product, I usually give them a pathetic discount e.g $27 and a lot of people are happy in the fact that they got a discount but you are always going to get ones that want more
@neilpatel
5 жыл бұрын
I think it depends on the margin as well.
hi does this apply to retail, what I have noticed is that people will always buy, however when there is a discount sales are higher, can you explain? i live in a country where people are looking for the best deal
@neilpatel
3 жыл бұрын
Offering a discount as exit intent can be helpful :) Or offering a discount in exchange for their phone number or email.
I would probably agree with you but in my situation we give a new customer discount of 15% because we have such a new and unique product. Some people are hesitant to try so the one time discount has helped us sell more product. Every situation is different...so evaluate before you discount discounts ;-)
@neilpatel
5 жыл бұрын
Always evaluate ;)
Instead of discounts, cost effectiveness plus product variations will be better
@neilpatel
5 жыл бұрын
Interesting thought
Does this concept apply to ecommerce for relatively low priced consumer goods? If im running ads, would it be advisable to eliminate 30% off discount within the ad copy? Many experts tend to argue that since its cold traffic for items that arent really "high value" you need to put forth an offer they cant refuse. Would love to get your take on this Neil! thanks
@neilpatel
5 жыл бұрын
I think it is worth testing both to see what drives the best results for you.
No
Yes. Cause I am new in the market.
@neilpatel
3 жыл бұрын
Awesome!
Thank you, Neil! I know you have a small business section of your agency. It would be great to be able to do this analysis you are talking about! Is this possible? The thing is that we are in a very small niche and it requires lots of commitment to understand what works and doesn't work for us! Thank you for all your help!
@neilpatel
5 жыл бұрын
You can email the agency at consulting @neilpatel.com and set up a call to discuss the project :)
Good advice thanks
@neilpatel
5 жыл бұрын
You're very welcome!
No more discounts
How could you tell them how much traffic your clients will get it they hire you? SEO is good and it's profitable and we could assign a value to conversion to show them roi. But only problem is, we can't guarantee HOW MUCH traffic they will get so how do you decide that?
@rosvokomppania
5 жыл бұрын
The answer is simple. You can't. Even Neil can't do it. What you can do is to make estimates based on volumes and positions. But the real problem here is that if you really are in that kind of situation you've probably explained/aproached the client poorly. None of my clients have ever asked guaranteed ammount traffic before closing the deal. As Neil said in the video don't sell features sell the benefits/end goal. SEO's end goal is to make make more money and have a better brand. Traffic is just a feature unless the site lives on ads/affiliate programs.
@punit5601
5 жыл бұрын
@@rosvokomppania thanks for explaining me :) Do you have any suggestion on what seo topic we should make our videos on so clients watch before working with us so we could avoid those kind of clients? Basically, the education part
@neilpatel
5 жыл бұрын
You can make a conservative projection but it is not possible to know exactly what will happen with the project
@punit5601
5 жыл бұрын
@@neilpatel so how do you educate people for this?
Wao amazing video.
@neilpatel
5 жыл бұрын
Thank you!
Great video Neil! I'll have to make the adjustment from saying what they're getting in stuff to what they're getting in results. No discounts, perfect :D
@neilpatel
5 жыл бұрын
Thanks, Stefania!!
Hi Neil, if I've priced my products to absorb any discounts that I might offer throughout the year, is that still a bad idea?
@neilpatel
4 жыл бұрын
As long as they're not overpriced and you're still getting a good ROI and conversion rate, then you should be fine!
hy bro big fan of u. I want to learn article writing, content writing can u teach me.
@neilpatel
5 жыл бұрын
There are plenty of articles on my blog that can definitely help you learn about copywriting and blogging
Yes 😩
Does this include sale for brands? I mean I shouldn’t make sale or promotions? Because somehow i feel it applies to my jewelry business too
@neilpatel
3 жыл бұрын
You can do sales and promotions, definitely :) Just don't overdo it
Hi Neil, i have a off topic question: Do you know a way or a tool to map your internal link structure. Like, i want to find out how many internal links go to a certain page and which pages these links are coming from?
@neilpatel
5 жыл бұрын
You can use Google Analytics to see how your traffic is moving around within your site
I can totally see the value of your advice though.
@neilpatel
5 жыл бұрын
Thanks!
I don't think this would work if you're selling a physical product because if you're not offering discount then your competitor would give. However, this would work for virtual products like yours.
@neilpatel
5 жыл бұрын
Thanks for sharing :)
The business of business is to make profit and customer satisfaction!! Devaluing your own product or services leads to death of your business
@neilpatel
5 жыл бұрын
Definitely :)
Just wish I could think of the benefits, because I’m not sure of the value of my product!
@neilpatel
5 жыл бұрын
You definitely need to figure that out
What about business like Amazon, Walmart, eBay, etc.? They give discounts.
@elindigeno1215
5 жыл бұрын
They're called Behemoths
I gave free samples to customers and part of my commissions to people for bringing me a customer.
@neilpatel
5 жыл бұрын
How did it work out for you?
@ripleystvnintendoswitch7346
5 жыл бұрын
@@neilpatel I'm selling Italian coffee, customers who loved coffee tends to buy my coffee after drinking it (free samples). I think this is more efficient than just telling people that my coffee is very good and nice to drink. As for the commission part, people are happy and more eager to help me recommend my coffee to other people. Currently there are a few people who helps me promoting my coffee to their friends or colleagues. Hope this goes well. I will follow up with them. :) Thanks.
Buying PS4 games or steam games that are on discount is what I always do 🎮 🤟
@neilpatel
3 жыл бұрын
Nice :)
300k FAMILY MEMBERS
@neilpatel
5 жыл бұрын
Yes! :)
Yes... but after this video - no 😊
@neilpatel
5 жыл бұрын
Nice!
Teamnodiscount
@neilpatel
5 жыл бұрын
I am on that team with you ;)
Neil, no disrespect, but I guess you are talking about a market where there is monopoly. For example, if I am the only service provider or a manufacturer for a particular product or service, I may have the leverage of not giving discounts to my client. However, where is such kind of market condition in real world? Just imagine you saying NO to your clients and your competition agreeing to providing them the discount which you said NO too. Could you shed some light on such a scenario Mr. Patel?
@ramina5003
5 жыл бұрын
completely agree. If your competition gives discount and you don't, customers will order from him and he will earn maybe smaller profit but still more that your zero profit. With giving discount we have already taken several competition out who refuse to give discount. Neil is great marketer but I think not same skill in actual physical business or execution. As an example I have asked several time quote from his company and they never got back to me.
@neilpatel
5 жыл бұрын
While that might help in the short term it won't be helpful in the long term. You don't want to be know as the company that will drop your rates because that is the company that will be associated with undervaluing their work and not delivering a quality service.
@shivamtrivedi2027
5 жыл бұрын
@@neilpatel I completely agree with you but what you are saying can be implemented in European or American market. However, I am living in India, here the market is very vibrant and full of competition. Every product which is in the market has more than a dozen manufacturers and they have no problem in lowering down there prices to get rid of their competitors. Lowering the prices is not because the end user is asking for it, it is used as a tool to gain monopoly in Indian Market. Keeping that in mind do you think your argument of not giving discounts can be used in Indian market. I guess you had used the example of your mom in your video. That is the same mind set of every Indian Consumer.
@stormtrooper3381
2 жыл бұрын
Exactly I have 7 competitors selling similar software. When a buyer says can I match a competitor and will buy from me it’s hard to say no when it’s 7% difference. I lost some saying no and can’t get back. Not sure if no is the answer 100% of the time.
No. I Never Discount.
@neilpatel
5 жыл бұрын
Good!
Then why the spinning wheel . . .
@neilpatel
5 жыл бұрын
Testing new things to be able to tell you all how it goes ;)
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