Price-Cutting Is for Sissies


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Sales is all about closing the deal, and in order to achieve that goal, a purchase price must be agreed upon. All salespeople, at one time or another, have had their price challenged. What do you do when that situation arises? As much as everyone in sales would like to consider themselves “great closers”, in reality, many are sissies when it comes to this important skill. They often boast about never discounting their product, but when they’re suddenly confronted on price, they fold faster than a cheap umbrella on a windy day.

Consider the following scenario you may have found yourself in. . . .You’re on the verge of closing the biggest deal of your career. Doing so will put a nice, fat commission check in your hands and you’ll soon be receiving kudos from everyone in the company. Now comes the curve ball. You discover that the customer is looking to you for a price discount and, to top it off, you find out about an equally qualified competitor that is willing to undercut your price. While you are under the pressure of being in the middle of the hunt, you are left with only two options. You can hold the line and not cut the price to keep your profit potential in tact. Or, you can cut the price and be willing to take a lower margin for the sake of landing the big order. Which do you choose? Although the tendency for many is to give in to the price discount, by being prepared ahead of time as to why your product/service can fill their need, you can avoid caving in under the pressure of the moment.

In a situation like this, your self-assurance is critical. Be confident in what you say and, more importantly, ensure that the customer is certain of the benefits they will receive by working with you. The cheapest price might be what everybody is looking for, but what good is a low price if it doesn’t deliver on what it is supposed to? When the customer requests a price discount, respond by asking them about how they intend to use your product/service, and what they expect to gain from using it. Your goal should be to get them to express both the pain they will experience if what they’re about to buy doesn’t help them accomplish what they want it to and the need they have for your type of product/service. Then you can explain how your product/service can alleviate that pain and best fill that need.

How can you establish a high level of confidence in your price? One of the best ways is by having a full sales pipeline. This means that you have prospects and customers at each phase of your sales process so you don’t have to worry about closing every sale. Your assurance comes in knowing that you’re making the right decision by not discounting because you “have” to.

The worst thing any salesperson can do when a customer is looking for a price break is to give in. Unfortunately, because many cannot confidently communicate their price, they often cave in. To overcome this problem, salespeople need to understand, in real terms, the buyer’s perspective of how they can benefit from the product/service. For example, if I’m going to take a trip and my destination is 1,000 miles away, I have several options as to how I can get there. I could hitchhike, which would cost me virtually nothing, but wouldn’t guarantee when I’d arrive. I could drive my car, keeping my immediate costs to only the gasoline (assuming the car does not break down), but my travel time could take several days. Or, I could fly, which would probably have the highest immediate cost, but would, undoubtedly, be the fastest. Because your goal in selling should be to help ensure the success of your customers, you can see from this example that the cheapest approach is not reliable, nor would it save time. In addition, most people wouldn’t want to take several days to drive to and from the destination. Therefore, because of the time it will save, the best option is to fly, even though it’s probably the most expensive. Since time is of the essence in many industries, its value is worth the extra money. Keeping that in mind, cutting the price is clearly not the most beneficial or efficient.

Besides being unable to confidently communicate their price, another common reason salespeople give in when challenged is because they believe the misconception that by offering a discount on the initial order, they can make it up on the next one. However, the truth is that there is no way to ever regain the lost revenue. Once the customer has accepted a lower price, that amount becomes their new level of expectation. Any other price is seen as an increase. Think of it from the following perspective: Would you believe a promise from your boss that if he/she were to hold back your next raise for a year, it would be made up to you later? We often kid ourselves into believing that we can get the higher price out of the customer on the next order.

Finally, when a customer requests a discounted price, it is important to remember that giving one is an immediate reduction to your total profit. Depending on how drastic you are willing to go, you are ultimately the one taking the pay cut. Is that what you really want to do? Consider that decreasing your price may help you land the initial sale but, over time, it still does not make up for the revenue you lost on the initial sale.

Maintaining pricing integrity is a challenge. It starts by being self-assured and it extends not only to the service you deliver, but also to the expectations of the customer. Don’t entertain their requests for a discount. Be confident in both your price and the product/service you offer. Ensure that your sales pipeline is full by spending adequate time developing it at all phases of your sales process. Consider how your product/service can help ensure the future success of your customers. Don’t believe the lie that you can make up your initial price cut on the next order. Without confidence in your price, you can say good-bye to your profits. Price cutting is for sissies!

Mark Hunter
Mark Hunter, "The Sales Hunter," is a sales expert who speaks to thousands of people each year on how to increase their sales profitability. For more information or to receive a free weekly sales tip via email, contact "The Sales Hunter" at


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