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Handling Discount Requests

By Harry J. Friedman Founder/CEO, The Friedman Group

The competitive nature of the retail selling environment today is such that many retailers have had to resort to a variety of techniques to maintain their volume. It is also the case that many customers want to haggle with you over the price of a piece of merchandise. A customer's request for a discount, even if approved by management, may not always be the setting for an easy close.

Suppose you encounter a customer who appears genuinely interested in a particular item, but who is also asking for a discount. If you perceive the discount to be absolutely necessary and are able to convince your manager of this fact, you may get some or the entire discount authorized. Politely excuse yourself, and consult with your manager about lowering the price.

Let's say that your manager gives approval for a partial discount. Let the customer know that you don't make this a regular habit and you are only doing it because you know he really wants the item and you want to see that he gets it. Also, at all times, keep information concerning discounts like you would valuables-in a safe-as you don't want your store to earn a reputation as an easy discounter.

If the customer is still unhappy with the partial discount offered, then ask the customer for a commitment. That is, ask how they will be paying for the item and whether you can show proof of this to your manager for a second try at a discount. If the customer is willing to do this, you can pretty much assume the deal can be done with a discount.

Once the manager authorizes any necessary discount, return to the customer and congratulate him. Let your customer know that a discount of this size is a big deal in your store and that it was a direct result of your tireless efforts. By doing this, you will condition your customers to feel like they've gotten a rare deal, rather than giving them the impression that they can come into your store and negotiate anytime they want to.

If the manager doesn't grant you the discount, blame it on the cost of the merchandise rather than on people. You can't afford to harm your customer relationships.

Here is a great example of how your dialogue may sound:

Customer: I think your store has the best selection of guitars, but these prices are too high. Is $1,450 the best you can give me on this one?

Salesperson: I understand your concern. However, we don't offer discounts because we don't initially inflate our prices. That's how we're able to offer the best value in musical instruments to our customers.

Customer: Well, I can appreciate that, but I'm not in any position to spend more than $1,250.

Salesperson: Of course. Well, since I can tell you really like this particular guitar, I'd certainly be willing to ask my manager about a discount for you. I would like to see you get it. Do you mind waiting? (Disappears to find the manager.)

Salesperson: Well, I couldn't get authorization for a $200 discount, but I did get authorization for a $100 discount which is still a substantial savings. Shall I write it up for you?

Customer: No, I'm sorry. I just don't have more than $1,250 in my budget to spend on a new guitar. I guess I'll have to look around a little more.

Salesperson: Wait. I know you want this guitar and I want you to have it. May I ask what type of payment you were planning to use? If I can show my manager that you're committed to buying this guitar, maybe he would reconsider the $200 discount. It can't hurt to try.

Customer: That's a good idea. Let's see. I'd like to pay $500 with a check and put the balance on my credit card.

Salesperson: (Goes to consult with the manager again.) Well, we're in luck. The manager checked our cost and found some extra margin, so I can sell you the guitar for $1,250. Let me tell you that your payment commitment really helped. Otherwise, I don't think we could have done it. Do you want me to wrap it up?

Customer: No, I'm going to try it out as soon as I get home.

Salesperson: Congratulations. I'm really glad this worked out.

Notice in this scenario how the salesperson:

1) Talked about how the store did not inflate prices 2) Stressed that the merchandise was already a good value 3) Said that discounts rarely occurred in the store

If you have determined that there is nothing you can do to make a price-driven customer happy, my advice is to tell these retail deal-makers, in a direct yet polite manner, that your store does not offer discounts because your prices are reasonable to begin with.

This approach will either dissuade the impossible-to-please customer, or it will encourage them to further analyze the value of the merchandise in question.

The goal of course is to sell our products at retail price. But for those situations when you cannot get past the customer's request for a discount, try using this technique. You may very well close the sale without giving away a substantial discount.





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