Salespeople are faced with the daily choice of short-term pain versus long-term gain. Rather than relying on confidence in their ability to effectively communicate the full value of their products and services, inexperienced salespeople will begin to offer discounts, price concessions and incentives in order to entice their prospects into a closed sale. If they succeed, they have created a customer with expectations. Every time they approach the customer for repeat business, the customer will demand a new perk, a new gift, a new instance of “something for nothing.” Unless the salesperson locks in the second sale in the same moment as the first (such as time-limiting a discount of 30 days against a long-term agreement in which the cost reverts to full price), they are playing a game that they will never win.
There are times in which these tactics are appropriate, and there are others that add up to a simple admission by the salesperson that they lack the skill or mental stamina to guide their prospect through the sales cycle.
The acquisition and ongoing nurturing of customers requires a series of skills that are usually learned by trial and error. The professional salesperson must possess a deep, almost fanatical interest in human psychology and what “makes people tick,” also known as “why they buy.” Every sales encounter is a lesson. Each lesson, accumulated over time, is like the single drops of water that form a rock. One lesson, one drop at a time, extended over years, results in a salesperson on the road to mastering their craft.
Just as you learn to ride a bike or a horse by getting on, falling off, getting up, brushing yourself off, and getting right back on again, you learn the appropriate and inappropriate use of discounts and incentives in the sales process by making money or losing money.
A nation-wide fast food restaurant chain recently offered a bold promotion. They mailed a full-color flyer to residents with over $25 worth of coupons for their food. Half of the coupons offered as much as a 50% discount for a meal, while others were of the “two for one” variety. In addition to the discounts, they announced a date on which customers could come to the restaurant for a free meal: two pieces of chicken with two tortillas and salsa.
On the day of the promotion, the parking lot at my local restaurant was full at opening time, with drivers circling the lot hoping for a space. The line for ordering extended to the door. Some customers simply took advantage of the free food and ordered no additional items. Others used coupons from the flyer and purchased food as well.
Was this promotion successful? A percentage of people showed up for the free food and will not return unless a similar offer is made in the future. A second group consisted of regular or semi-regular customers who might have made an extra, unplanned trip to take advantage of the free food. The …