How should I handle a customer’s request for a discount? A great question, but in order to answer it properly it is important to know whether your company allows discounting. Therefore, I will answer the question both ways, if you work in a store where you are not allowed to discount, and if you are working in a store where discounting is allowed.
First, we need to understand that some people ask for a discount just to ask, to be sure they are getting the best price possible, or to play the negotiating game. Because they asked does not mean you have to give a discount in order to close the sale.
If you are working in a company that does not allow discounting then you need to be very clear with the customer and increase the customer’s perception of value when buying from you. This is accomplished by letting them know that you are different from other stores, many stores discount at the mention of a price consideration. It all goes back to the customer’s perception of value and how good of a job you did in creating or increasing the customer’s perception of value with the words that you used and how you sold yourself and the store.
For example, the customer says, “This ring is gorgeous, what is the best price you can give me?” You should respond something like, “Here at ABC Jewelers we take pride in offering our customers extremely competitive prices without having to play the discounting game. Unlike some jewelers that mark their prices up to offer a discount, we price our jewelry at the best price possible. I know that she is going to absolutely love wearing this piece and hearing the many compliments she will receive. Would you like me to gift wrap it?”
When you increase the customer’s perception of buying from you and closing the sale you might be very surprised at how many customers say, “Yes.” Again, value is a perception and it is up to the salesperson to make sure that the customer’s perception of value for the merchandise exceeds the customer’s perception of value for their money. Once this is accomplished then the sale will be completed.
If you are allowed to discount then I have to assume that there are some limits. When offering a discount I would always start with the minimum amount that you feel needs to be given. In addition, never offer a discount when face-to-face with a customer without physically doing something for the customer. In other words if a customer says, “What is the best price you can give me?” Do not just say I can give you 10% off. This does very little to increase a customer’s perception of value in the discounted price. I call it “going on a quest.” Say to the customer, “I need to check the computer to see if we have any room to move on this piece, let me see what I can do.” Then go in the back room or go to the computer to let the customer know that you are doing something special for them and it is not something that just anybody gets. At this point I would come back out and offer half (or less) of what my allowable discount is. Always offer the discount as a dollar amount and not as a percentage. Some people cannot compute percentages in their head as easily as others can and they may become confused.
For the purpose of this example, let us say you are showing a $1000 piece and you are allowed to discount 20%. You say, “I checked the price sheet and you are lucky I can give you $100 off, how did you want to pay for it?”
In many cases that will be enough to close the sale, however if the customer says, that is still more than I wanted to spend. I would then say, “I will go and talk to the manager, may I ask if you will be paying by check or credit card as this may make a difference in the amount we can discount further.”
Get the commitment from the customer on how they are going to pay then go back to the back room, wait a few minutes and come back out and offer your full (or less) allowable discount. When you return you might say, “The manager said that since you are paying by check I can offer you an additional $100 off making the piece $800,” or “Good news, I can take another $75 off even if you use a credit card. Shall I gift wrap it for you?”
In this way, you will be letting the customer know that they are getting the best possible value and that you are doing something special just for them. You will also be protecting the profits of the company when you do not start with the maximum amount of discount that you are allowed to give.