I am sure pretty much each and every small business owner has had this request. Whether from family or friends, or a random new client! But how to handle discount requests.

The thing about doing business in South Africa – is that discount negotiation is part of the culture. It is not just on a small business scale that this request is posed but pretty much in every sector and on every level. You have probably also asked for discount at some point or another.

The problem with a request for discount is that:

1. You have to deal with it

2. You want to grow your business with clients and

3. You still need to make a living

 

You can see how this is a catch 22 situation for you and your business. It is the same as dealing with any other contractual situation in your company. Start off by not being afraid of clients and their requests. Most of the time they are just trying to negotiate the best rate or save a little money.

 

Attorneys also get quite a bit of discount requests and often need to deal with it. The point I am trying to make is that – it is not because of who you are, or because they think you are a pushover or whatever the case may be. The client is really just asking for discount because he always asks or because he/she has a connection with you.

 

I believe in being prepared for these type of situations. Most of my small business clients will consult with me after giving the discount and discuss the problems they are now facing because of the discount: such as a further discount request or an expectation that has now been created.

 

How to be prepared for discount requests:

 

1. HAVE A DISCOUNT POLICY:

It is really not complicated to have a discount policy. It is basically you formalizing when and why and how you will give discount. You can write something short – like a standard email reply which depicts under which circumstances you will give a discount and what the discount entails. (download my free discount policy)

 

2. BELIEVE IN YOUR DISCOUNT POLICY – DON’T BE AFRAID TO SAY “NO”:

If you have a discount policy, then be confident about it. WHATEVER YOU DO – DO NOT DEVIATE FROM YOUR POLICY!! Not even for the Pope! If your client is a respectful client they will respect your policy. If they respect it, they will do business with you irrespective of discount. If they do not respect it, then they are not worth having as a client, chances are they would not have respected your contract terms either.

 

3. PREPARE A TELEPHONE CONVERSATION:

THIS IS VITAL!! You might be thinking to yourself: Why can’t I just say no? or Why is it so easy for other people? The short answer is that they are prepared and have practiced it. Fortunately it is not some sort of super power that you are born with, it is a skill that you can learn.

 

I am going to share a secret with you: but even attorneys practice before making difficult calls. They write down what needs to be said or make sure that they are prepared. They never just call and by chance say the right things.

 

4. FAMILY AND FRIENDS CAN BE FOES

This sounds very harsh (and know that I really love my friends and family), but you need to manage your friends and family’s expectations about doing work for them. This is where a discount policy is exceptionally handy. Give a little extra bit off to friends and family but within your policy. It is still your time and work and I don’t believe it to be a fair request from them to want you to charge nothing for a service. You still need to make a living. They need to respect your business and your time. I often help my parents out with a contract or review for free but that is my discount policy. In other words it is controlled and consistent.

 

5. ACCEPT THAT YOU ARE GOING TO LOSE SOME CLIENTS:

Sometimes this is a difficult concept to swallow. After all, you trying to build your business! But building your business is also about building it with the right clientele. I have seen it many times that when you lose a client because of it, you gain business elsewhere. And I have also seen that the clients who disregarded you because of the discount, comes back to you – because you are the best at what you do.

 

6. YOUR SERVICE OR PRODUCT IS WORTH THE MONEY THAT YOU CHARGE

Believe in yourself and your business. I am sure you have researched your prices and your value offering to the max. Do not let clients let you believe any less of your business.

 

7. IT IS NOT WRONG TO GIVE DISCOUNT

Again, it is a marketing tool. But the important part is to understand why you are giving discount. What is your REASON or MOTIVATION. If it is because of a long standing relationship then it’s okay. If it is to get more business in, then it is also a good idea. Just don’t ever feel forced. The key to discount is to do it in a controlled manner and not rely on your own emotional state in the moment to give it that you might regret after the fact.

 

Summary

To summarize, be prepared by having your discount policy. It will really just enable you to deal with these requests in a professional manner with confidence. (download my free discount policy)