Find Out Why Discounting Is the Last Thing You Should Do, Not the First!

Simon Hazeldine

In the competitive world of sales, the temptation to offer a discount early in the sales process can be overwhelming. After all, discounting can create urgency, make customers feel like they are getting a great deal, and, in many cases, help close a sale. But leading sales experts and research show that discounting should be a last resort, not your first option.

Premature discounting not only erodes your profit margins but can also undermine your brand’s value and set harmful pricing expectations. Instead, successful sales professionals focus on understanding customer needs, emphasizing the unique value of their offerings, and strategically handling pricing discussions to maintain profitability and long-term customer relationships.

In this blog post, we’ll explore why discounting should never be your first move, the dangers of price reductions, and the best process to handle discount requests while ensuring you maintain the perceived value of your product or service.

Understanding Customer Needs Before Discussing Price

Before price even enters the conversation, the most effective salespeople focus on deeply understanding their customer’s needs. This means identifying the key challenges the customer is facing, their goals, and what success looks like for them.

Too often, sales professionals rush to talk about price without first diagnosing the customer’s pain points. As I often say when working with sales teams “Customers don’t care about you—they care about what you can do for them.”

By uncovering what the customer truly needs, you can position your product or service as a high-value solution rather than just a commodity that can be negotiated down in price. When you demonstrate that your offering provides significant business impact, price becomes a secondary consideration.

Key Questions to Ask Customers:

What are the biggest challenges you are facing right now?

What impact are these challenges having on your business?

What would an ideal solution look like for you?

What outcomes are you hoping to achieve?

When you shift the conversation toward problem-solving rather than pricing, customers begin to view you as an advisor or consultant rather than just a salesperson.

The Dangers of Premature Discounting

Offering discounts too early in the sales process can create multiple problems, some of which can have long-term consequences for your business.

1. Discounting Erodes Profit Margins

Each dollar you discount comes directly from your bottom line. Consider this: if your profit margin is 30% and you offer a 10% discount, you must sell 50% more units to maintain the same level of profitability.

This is a dangerous financial trap many businesses fall into—believing that volume will make up for discounts when, in reality, it often leads to revenue shortfalls.

2. Discounting Devalues Your Product or Service

When you frequently offer discounts, customers start questioning the actual value of your offering. They might wonder, “If they can afford to sell it at a lower price, was it ever really worth the original price?”

This can lead to:

Reduced perceived quality of your product/service
Customers delaying purchases, waiting for the next discount
A reputation for always negotiating on price rather than selling on value

3. Discounting Creates a Dangerous Precedent

Once you give a discount, it’s difficult to walk it back. Customers will expect the same (or greater) discounts in the future, and competitors may take note and undercut you further.

A better approach? Sell on value, not price.

A Strategic Process for Handling Discount Requests

When a customer asks for a discount, don’t panic or concede immediately. Instead, follow a structured approach that protects your margins while still making the customer feel they are getting the best possible deal.

1. Return to the Customer’s Needs

Whenever a customer asks for a discount, redirect the conversation back to their original challenges and needs. Remind them why they were interested in your solution in the first place.

For example:

“I understand you’re concerned about pricing. But let’s go back to what we discussed earlier. You mentioned that your biggest challenge was [X problem], and the cost of inaction would be [Y consequence]. Our solution is designed specifically to help you overcome that issue and achieve [desired outcome].”

This helps refocus the conversation on value rather than cost.

2. Re-emphasize Value

Next, reinforce the unique benefits your product or service provides. Use case studies, testimonials, and quantifiable results to demonstrate why your solution is worth the price.

For example:

“Companies that have implemented our solution have seen a 30% reduction in operational costs within six months. Our expertise in [industry] and proven track record in delivering these results is why our pricing reflects the value we provide.”

The more clearly you communicate the ROI (Return on Investment), the less important price becomes in the decision-making process.

3. Propose an Alternative Solution

If the customer is still hesitant, consider modifying the offering instead of lowering the price. This could mean adjusting the scope, delivery model, or payment terms.

For example:

“If budget is a concern, we can explore a phased implementation where you start with the core features now and add more later as your needs grow.”

This ensures that you maintain value while making the purchase more feasible for the customer.

4. Negotiate for Something in Return

If a discount is absolutely necessary, never give it away for free. Instead, ask for something in return that provides equal or greater commercial value.

For example:

A larger order commitment
Longer contract duration
Case study/testimonial agreement
Referrals to other potential clients

By structuring the discount as part of a trade-off, you maintain control of the sales conversation and keep the perceived value intact.

5. Provide a Discount Strategically (If Absolutely Necessary)

If a discount is unavoidable, frame it as an exceptional gesture, not standard practice. Make it clear that it’s a one-time offer based on specific conditions, such as:

“I appreciate your interest in our product/service. Given our commitment to delivering exceptional value and our goal of building a mutually beneficial long-term partnership, I’d like to propose a tailored solution. If you are able to move ahead before (deadline), instead of just a straight discount, we can offer a package that not only provides immediate savings but also ensures ongoing value and support. It’s designed to align our success with yours:

A 3% price reduction on your initial order
Priority access to our new features for the next 6 months
A performance guarantee: if we don’t meet the agreed service level agreements in the first quarter, we’ll provide an additional 2.5% credit towards your next order“

Conclusion: Sell on Value, Not Price

Discounting may seem like a quick fix to closing a sale, but it can have long-term negative consequences for your business. Instead, focus on:

Understanding and addressing customer needs
Clearly communicating the value and ROI of your solution
Structuring pricing discussions strategically
Negotiating to ensure any discount provides equal or greater value in return

By adopting this approach, you’ll maintain strong profit margins, uphold your brand’s value, and foster sustainable, profitable customer relationships.

Remember, customers don’t buy products or services—they buy solutions to their problems. If you can effectively demonstrate that your offering delivers superior results, price becomes a secondary concern.

Start focusing on value—not just price—and watch your sales success soar!

Find Out Why Discounting Is the Last Thing You Should Do, Not the First!

Understanding Customer Needs Before Discussing Price