Fight recession discounts with the ultimate strategy list

In a recession there is greater pressure on prices. I’ve been collecting a list of discount fighting strategies that proactive organizations can use to reduce the frequency and severity of price discount requests. If you know another approach, please post. I'll report the list and credit donors.

 1. Bring your client a new customer.

As your cleitn ramps up to handle the  new business you have brought in they will buy more from you.To keep you motivated to send more business their way it is unlikely they will pressure you for lower prices. Everyone wins.

2.      Break a purchase into small pieces.

Instead of asking for one big order, break up buying so it can be spread out over a period of time. For example, instead of buying a year’s worth of consulting, allow clients to buy a month at a time. This way you are not viewed as a “big” or capital purchase. When selling “pay as you go” it is possible to present a lower monthly price vs. a years contract and slip under the radar of the price grinders.    

3.      Offer financing.

If your client can not find financing from a bank to buy your product, become the bank. Offer the professional equivalent of “lay away.” (Thanks to  Denis Pombriant, Founder Beagle Research Group). It’s hard to ask for a steep discount from the company banking the purchase.    

4.      Network your customers.

If your customers are all struggling with slow times, a network where they can share ideas could be very valuable. The topics they discuss do not have   to be about your product, just about improving business. If you bring peer shared ideas that help grow your clients business, they will be less likely to pressure you on price. (Thanks to David Bonnette, Group VP, Oracle)

5.      Offer a consolidation discount.

 If you are in a business where your overall costs go down when volume goes up, offer to lower your prices if they consolidate business with you. For example, if a client now buys from three competitors, consider how much of a discount you could offer if they gave you all the business. If this plan works you are offering a discount but could make a lot more profit.   

6.      Price on profitability.

In every company, some products are more profitable than others.  Can you lower the price of a low profit item to encourage the buying a high profit one? Do the math. If volume on both products go up you could make more profit by lowering some prices.

7.      Include a free service.

 Focus on your organization’s core competencies and you may find internal expertise that could be leveraged to offer services such as advice, support, planning, or financial analytics. In slow times, some of these knowledgeable internal people may have less to do and cold be deployed to offer extra value and keep prices from deteriorating.

Now consider, if a client were to buy these same services that you could offer, on the open market it would be cash out of their pocket. Point out the dollar value you could bring in the form of services to fight recession discounts.   

8.      Bring ideas.

Get the top thinkers in your organization together and brainstorm on how to improve business for your clients. If the ideas you come up with would result in a direct sale for you, put it aside and think harder. Business improvement ideas generate business for you by generating business for your client, not sales for you. If you show up on a call and share "five creative ways a client can buy more products from us" that will be the last “new ideas” presentation you get to make.

 If you are seen as a source of ideas that really do improve a client's business you will be invited back again and again, and asked less for discounts.  

9.       Involve clients in product development.

 Start to design a new product? While still in the developmental process, show it to select clients and ask for feedback. Clients who feel involved in a product’s development are less likely to ask for discounts when the product comes out.

10.  Do a research project.

If you can do a survey that isolates best practices for your clients to win business or save money during a recession, and the insights you share are truly valuable, your value as a supplier goes up and price demands go down. 

11.  Document your value proposition’s ROI.

Anything can be measured, but ROI is often hard to directly measure because of there are many variables.  For many product categories this kind of documentation can be expensive. But anything can be measured given a big enough budget. But weigh the benefits. Discount requests often disappear when can prove the ROI of your value proposition.  

12.  Add or enhance an online service component.

 Professional customer service has become a commodity that rarely differentiates products. But if you can offer a clearly different or improved form of customer service than competition you can develop an edge. Online service is often a place where companies can establish unique support services. If you can offer something of ongoing value that your competition cannot, you can often keep pricing in place.

13.  Invest in client education programs.

 Recessions are great times to build client understanding. Clients may be more open to educational programs since their industries may be in a time of flux. But unless the education rings your client’s cash register it is unlikely they will see it as a big enough value to skip asking for discounts.

14.  Offer “sample services.”

 You have a client who buying one product from you and want to interest them buying a second product, “Sample” the second product into their next purchase. You client gets a free sample, which can be viewed as extra value, and reduce the demands for price concessions. You get a free form of advertising. 

Do you know of other strategies to fight recession discounts? Please post them. I'll repost this list and give full credit to donations. 

Comments

[Nick Moreno]

You make excellent points. In this economy, you must stay very close to your customers. Your competition is also hungry so expect them to go after your clients. This is no time to just play offence.

Thanks for the good read.

Nick

[Proposal Software]

The list of strategies seem to be more than enough to fight with recession and competitors. Tip number 9th and 12th are great. Involving customers n your operations or decisions mean your customers are there for you forever.

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