Jun 14, 2021 • Podcast

What if the buyer uses a service failure to leverage a discount?

Paul explores the scenario in which an existing customer asks for a discount on new business based on a previous bad experience.

Show Notes 

“Nobody is 100% 100% of the time.”

“View those moments where we mess up as opportunities to build…”

Be able to detail what your company did to solve the problem.

Remind the customer of their pressure points to buy your solution.

How can you build more value in without affecting the price?

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What if the buyer uses a service failure to leverage a discount?

(Transcribed from podcast)

Today, we’ve got an interesting question. This is something I’ve run into before. I know other salespeople are experiencing this challenge, but a salesperson who sells, we’ll call it capital-type of equipment, they reached out to me because they had an interesting scenario. They have a new deal that they’re working on with one of their existing customers. So this is an existing customer they’ve worked with in the past, and it’s getting towards the end of the negotiation, so this salesperson almost has the deal pushed across the line, however, the customer is starting to leverage a previous bad experience into a discount.

Basically, what the customer is doing, they’re saying, “Hey, look. You guys messed up over here.” I don’t know how long ago it was, but the customer’s saying, “You messed up over here. Because of that, you guys need to do something on the price. You need to make it up.” So this customer is trying to leverage a previous issue, or bad experience, or some sort of product or service failure into a discount for the new piece of equipment that they’re trying to buy. So that’s the question we’re going to answer on today’s show: What if the buyer uses a previous bad experience to leverage a discount?

Before we get into answering that question though, a quick shout-out to Andrea over at [The] Creative Impostor Studios. Andrea does such a great job supporting the podcast. In fact, she just sent me an email the other day with some tips and ideas on what to do during the summer months of podcasting. So she’s always offering these tips and ideas. So if you’re thinking of starting a podcast, or if you already have a podcast and you’re looking to make a change, Andrea and her team at The Creative Impostor Studios do an absolutely wonderful job. So make sure you check out her website. We’re going to have a link over there to her website on this episode’s webpage.

Also, pick up your copy of Value-Added Selling. It’s going to remain your go-to guide to not only create value for your customers, but also, it’s going to be your go-to guide for getting past discounts. Discounts are still the number-one challenge that salespeople face is how do you sell on value versus price? Well, this book was created for that very reason. So make sure you pick up your copy. It’s available on Amazon or wherever you get your books.

Now, here is the deal. If you have a customer that is trying to leverage a previous bad experience into a discount, you’ve got to remember a couple of things. First of which, the customer isn’t exactly wrong in making this request. Think about it. If you were to buy something and there’s some sort of mess up, something bad happens, there’s a screw up, you’re going to want to be compensated for that.

I remember, gosh this was a few years ago. I was buying a water cooler for our office. And I went to a well-known retailer. I’m not going to mention them because I hate mentioning companies that normally do a good job but they have one bad screw up. I’m not going to mention them, but I bought this water cooler from this company. And I get it to my office. I get it put together and get it all set up, and I realize that the cord that I plug in the water cooler with is cut in half. And so I realize this after I put all this work and effort into getting it set up. So I brought it back to this retailer and asked them for a new one. I explained the situation. I got the new one, brought it back to the office. This time I checked everything to make sure it was working properly before I installed it. It wasn’t the same product, but the same thing went wrong with the second product. I remember going back to that retailer and I said, “This is ridiculous. I’ve spent hours trying to put this together and this and that.” And you know, it was really kind of venting my frustration, and they actually gave me money—cash money. They said, “We’re going to not only return this, but we want to give you a $100 cash for your troubles.” I was shocked. I mean, I couldn’t believe it, but that compensation piece they gave, I will say it did smooth over that rough patch. So I’m still a customer of this retailer. They do a fine job. It was just that one occurrence.

So the reason I share that story is, remember, when your customers have a bad experience and they expect a future discount, they’re not exactly wrong, okay? But there is a better way we can do it. Especially if having that service or product failure is uncharacteristic of your company. So that’s what we’re going to focus on in today’s show.

First things first, when you had a previous bad experience, be able to detail for the customer and remind them how you fixed that issue or solved the problem that they were having. Remember that nobody is 100% 100% of the time. You’re going to mess up. Things are going to happen. And that’s just part of business. It’s not that things are going to happen. It’s how you respond to what happens that will differentiate you and your competition. There was a great book by John Goodman. He wrote a book called Strategic Customer Service, and in his research, he found that when we mess up and we actually fix it and the customer is satisfied by the resolution of the complaint or the problem, they actually become more loyal to you then if they never would have had the issue. As a salesperson, it’s important to view those moments where we mess up as opportunities to build loyalty.

Now we have to remind the customer of how we fixed the issue and all that good stuff. But when it comes time to negotiating a new deal that you’re working on, a new order, whatever it may be, and the customer starts talking about that previous issue, it’s important that you highlight how you fixed the problem before. Be able to detail and explain what your company did to solve the problem, and use that as a talking point to explain how committed you are to the customer and that, “Hey, when things get messed up, we’re going to be here. We’re going to support you.” So, when the customer starts trying to leverage that previous experience into a discount, be sure to remind them that you fixed the problem and the issue, and that should help start to change the conversation.

Now, the next thing we want to do— In the previous experience and for this one salesperson—this one salesperson is selling industrial-type of equipment that is, by far, the premier equipment in the industry. They’re the market leader. Their equipment will help their customers profit more than many of the competitors. So I suggested to this salesperson, I said, “Look. Go back, and when the customer starts rehashing that issue again, remind them of all the value that your equipment has created for the company. Remind them of some of the profits that it’s helped them achieve and help them just understand that, although yeah, there’s that one issue, it pales in comparison to the immense value that you’ve created for the customer. Be able to list that value. Be able to itemize it. Share examples. And when you do that, it’s going to help take the focus off of the issue, whatever it is that they’re thinking about.”

Another thing to keep in mind, this could be pure gamesmanship on the part of the customer. This could be the customer just playing a game with you. And if the customer is playing a game, somebody’s got to win, somebody’s got to lose. And if someone’s got to lose, it’s probably going to be you, because they’re going to want to win. So in order to do this, you have to diffuse the game that they’re trying to play. And when a customer starts playing a game on you, remember that whenever you recognize that they’re playing a game, the game will lose its power over you.

So diffuse the game. And how you can do this, as you can say, “You know, Mr. Customer. I understand that that was a frustrating point when this happened. We were able to take care of it. Here’s how we fixed the problem. Not only that, but you know, that one tiny issue, it really pales in comparison to the immense value that we created on this project. I understand that you’re frustrated with this, but let’s work together in how we can move forward past this.” And what you’re doing is you’re diffusing the game. And as soon as you recognize that they’re starting to play a game with you, it loses its power. So just be aware of that. Remind yourself that “maybe they’re just playing a game with me.” And if they’re just playing a game, diffuse it.

One other thing to remember is, you can still apply pressure. What buyer is trying to do at a fundamental level, they are trying to make you feel the pressure. They’re making the salesperson think, “Okay. Sheesh, we messed up last time. I owe them something. I should take care of them. I need to do this. If I don’t, I’m going to lose the order.” The customer is trying to make the seller feel the pressure. When salespeople feel pressured, they discount. Our research shows this time and time again. So instead, you can also highlight the pressure that customer is experiencing. If they’re facing pressure to buy your solution, remind them of that. If there are very few direct competitors, remind them of that. If they have a unique problem they’re trying to solve, remind them of that. If they need to take care of this quickly, remind them of that. These are sample pressure points that will take the focus off of that discount rather that they’re trying to leverage.

And then finally this last piece. Ask yourself, ‘What other concessions can I make besides price?’ If the customers looking at this saying, “Okay, you guys really messed up last time,” ask yourself, ‘Okay, what can I offer them besides a discount that will create more value?’ Maybe it’s offering them complimentary training. Maybe it’s offering them additional labor hours of install time at no charge. Maybe it’s offering them upgraded equipment at no charge. Think about how you can build more value in without discounting your price.

Make it a big day.

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