Subscribe to Entrepreneur for $5

The Danger of Discounts and How to Avoid Them

Opinions expressed by Entrepreneur contributors are their own.

Warren Buffett once famously said, “Price is what you pay. Value is what you get.”


Though the billionaire investor was referring to stocks, the statement is telling for young entrepreneurs too. For those who must, say, guide a sales staff, it’s important to instill in them the value of your product, rather than focusing on its price.

Otherwise, when price is the only factor, rampant discounting can occur. That’s, of course, a dilemma that should be avoided.  Here are some common excuses for discounting and ways to counter them:

The customer demanded it. Customers will always ask for a discount, but very rarely will they demand one. If this excuse pops up, it could be an indication of a salesperson’s lack of discipline.

They could also need coaching. Consider providing a script with more ideal responses and questions. This way, they can better uncover customers’ needs and more effectively communicate the value of your product or service as it relates to the customer.

Related: 5 Tips for Targeting Your Ideal Start-Up Customer

Our competitors were cheaper. This may be true, but unless you are selling a commodity it is probably not the deciding factor in a purchase decision. This excuse could mean that your company lacks that “special sauce.”  If this is the case, you need to figure out how tostrategically differentiate your business.

If your business does offer something unique then it could be that the salesperson lacks the competitive knowledge required to position your offering.  In this case, take the time to help them understand what makes you unique vs. your competition.

They just aren’t smart enough to ‘get it.’ If this excuse comes up, it  could mean you simply made a bad hire. Salespeople that don’t care, talk bad about customers or are incompetent can destroy the team. Get rid of them quickly.

Another possibility is that the salesperson isn’t motivated to understand the client need and, as such, can’t communicate the benefits effectively. Identify if this is a coaching opportunity or a firing opportunity.

Related: Seal the Deal: The 6 Laws of Successful Sales

A final possibility is that your sales process may simply be new for them. This instance does not have to end poorly, but may require extra time, coaching and sales training to prepare them and set them on the path to success.

I got a foot in the door. If a small lead vs. a sale isn’t enough for you, determine if this person is lazy. If he isn’t, make sure he truly believes that subsequent sales will come — at full price. But do be careful here, as the customer may just be trained to wait for discounts.

Kevin Hiser

Written By

Kevin Hiser is the president of QStart Labs, a web development and startup advisory-services firm Columbus, Ohio. There, he and his team assist in the launch of 10 or more startups each year. Hiser is passionate about helping entrepreneurs and is always willing to take time to share thoughts and advice over a beer or coffee, so feel free to contact him anytime you want to bounce ideas around. And follow him on Twitter @khiser0001.