Whether it’s to ask for a special discount or trying to suck an extra product or service out of you for free; deals, discounts, freebies — all cut into your bottom line.
As a business owner, you can’t afford to be giving it away all the time. Certainly not in most cases. A free pen or some other swag bearing your company name costs pennies, while also offering limitless marketing potential.
On the other hand, giving significant discounts and/or free labor will not only cut into your profits today, but it also opens the door for even more exploitation when that same customer comes around again asking for another discount, or tells others about your generosity.
Here’s a simple step-by-step everyone should follow when dealing with discount hunters and freebie hagglers:
Find Out Why
In other words, ask why they want a discount. The incessant haggler-type, who’s trained themselves to always ask for a better price or extras, won’t usually have a fair answer when asked this. Those who do have a legitimate reason will always speak up. Perhaps a new competitor has moved into town and is undercutting your prices — maybe an old competitor that you know offers an inferior product has caught the customer’s attention and they need you to educate them as to the pitfalls of buying from that competitor. And, it could just be that they like free stuff or that they understand that we rarely get in life what we don’t ask for. Regardless, knowing their reason will allow you to assess their motives and your next move, while also making them think that you’re not the type to say no without listening first.
Weigh Their Request
After finding out why they want the discount, you can easily determine if it’s justified. Perhaps they’ve just informed you that they weren’t happy with the designs your artist submitted to them last time, but the employee was gruff with them and they decided to not pursue the revisions they wanted because of the good relationship your two companies have together. That’s a prime good reason for offering a discount this time around; in particular, if it’s the first time they’ve asked. Same for product discounts or free items: If a good customer tells you they received some defective items in their shipment, but didn’t have the time or inclination to pursue a replacement at the time, there’s no good reason to deny their request.
Quick related sidebar:
I still remember how slighted I felt by my (then) satellite provider when I ordered, but did not receive one of Anderson Silva’s early title defenses after he came into the UFC. I had ordered the fight early in the evening, was watching the free previews that took place before the main event, and felt my heart sink when the event was set to start and I got the dreaded “Please contact Starchoice PPV services to order this event.” I immediately called customer service and knew they must be having problems because the automated voice simply said to leave a message and they would call me back when they had time. Figuring my order didn’t go through and I wouldn’t be charged, I gave up on watching what ended up being a terrible card.
A month later I received a bill for the event. I called to clear things up and they told me they could find no record of any problems with their service on the event in question and that the best they could offer was a couple free movies — an offer I know they’re allowed to make to anyone whenever they wish, for no reason at all. This after I’d bought and paid for twenty-some events prior.
If they were weighing my request with the fact that I had bought over a thousand dollars worth of events without any complaints, you’d think they would have considered giving me a free PPV, regardless of whether my complaint was valid or not, right?
Weigh the request carefully before proceeding to the final step…
Have a Firm Policy in Place
This is important and you need to train all your staff (especially salespeople) to do so also. Do this after you’ve asked and listened for a reason and determined there’s no legitimate reason to grant their request.If you’re the boss, you need to answer politely, yet with confidence that what the customer is asking for is something that you simply cannot do.
Tell them such a deal goes against your policy — even mention that you’d be out of business if you did it for everyone and that you’re a proponent of fair play — all customers get treated the same. Employees should answer with the same level of politeness and confidence, making it very clear they have the authority to accept or deny the request and that again — the request goes against policy — it’s not just the customer in question, the company doesn’t honor such requests ever.
It’s all about setting precedents so you don’t open the door to constant price negotiations whenever you deal with them or the people they talk to.
What’s your strategy for avoiding doling out costly discounts and freebies?
Main Image Credit: Mister G.C./Flickr