How to Handle Discount Requests: A Guideline for the Most Common Cases

The prices are unreasonable! Uncle Tom offers cheaper services! And he includes kitten stickers in every shipment for a LOWER PRICE. I wrote you a review on Google Maps; does that mean nothing to you?

This is a daily occurrence for us. Not a day goes by without at least one person asking for a discount or questioning the prices of products and services. Obviously, this is a relevant topic for almost all business owners, so it is best that you are prepared for an onslaught of arguments why a specific person should be paying you less. In this article, we are going to discuss the best courses of action regarding the most common types of such interactions.

There are several types of customers that may demand a discount. They are found among almost all nations, races, and countries, so by categorizing them, we can come up with rather universal strategies that a broad variety of companies can implement.

Probably the best customer that a company can have. It is a customer who is ready to turn a blind eye to the company’s weaknesses and instead emphasizes its strengths. He stays loyal to the company and its product through thick and thin and acts as an unpaid promoter among their social groups.

Strategy: try negotiating with them; never outright reject their requests. Try discovering their reasoning behind their request. Once you know why, you will also know how to deal with the situation. It is much simpler than it may seem. For example, they want to grow their enterprise and now may need to buy your product in bulk; it may be profitable to negotiate the optimal price for the product. Another reason might be financial problems on the customer’s side. In that case, dialogue is also your friend, since losing a loyal customer may be a far greater loss in the long run than just giving them a reasonable discount. Moreover, it might even further reinforce their loyalty to the company and the product. However, a loyal customer might develop the feeling that they deserve a discount for continuously choosing your company. You might feel the need to succumb to their demand in order not to lose the customer. In reality, just think about the benefits and drawbacks of providing a discount since, usually, the customer will remain loyal regardless. They might have been in the mood to ask for a discount, that’s all.

Nevertheless, providing discounts is a great way to boost and retain loyalty of customers. They are more likely to be forgiving of minor shortcomings such as bugs, slight delays, glitches, etc.

Summary: establishing a dialogue is the key. Find out what happened and assess the potential risks and gains of rejecting or agreeing to a discount. In this situation, it is almost always preferable to keep the client than the money.

You know the one. He just looks like a large investment personified. His offers sound like the best thing since sliced bread and he described his business more successfully than Eldorade in the carefully constructed email he had sent you. He reeks of potential and wealth and promises to provide you with divine guidance to success. Who wouldn’t want to lose a little bit of money on some discount for him in exchange for what sounds like Eldorado?

Strategy: calm down and breathe deep. Of course, such a client will want to appear more important and even intimidating than they really are. It is also important to assess the potential profits of working together before actually discussing anything (there may be none). However, if you decide to work with them, communication is key once again. With this one, however, it may be worth being cunning and making such a customer think that every clever idea on cooperation is theirs. Such clients are easy to lose since they usually have no desire to deal with the tedious aspects of business, so be patient. They are not easy to get back. Choose a professional tone of voice and do not start offering discounts left and right. The customer should feel valuable and a discount should not be baseless. Instead, offer volume-based benefits for long-term subscriptions, for example.

Playing into their somewhat inflated self-perception is also quite important. It is crucial to make this client feel important and that you went to great lengths to satisfy their request. During the negotiation, bring up briefly that it was extremely tough to convince the team to agree to the discount. This way, not only do they feel important, but they are also somewhat obliged to agree to the existing offer since it was “so hard to get.”

Summary: Offer discounts based on the quantity of purchases. Describe the discount as if you had to climb Mount Everest to get it and then some.

Customers love playing market analysts and comparing prices among competitors. And, honestly, fair play, sometimes you can indeed find the exact same products that go for different prices. Research before purchases is important. However, these types of customers have different intentions. They may either genuinely plan on changing companies or they want to look for softspots in yours.

Strategy: You can’t really argue with them since, after all, there may be competitors that offer similar products for lower prices. This case will require some intricate communication skills. If the customer really wanted to leave right off the bet, they would have done that without saying a word. However, there is usually something they want if they bring up this issue, which is a strong basis for dialogue. Find out what the customer might mean by the “other company” and figure out why their price is lower. Maybe the quality is poorer or they have problems with shipment. Use this as leverage while negotiating with the customer and try genuinely explaining why your product costs as much as it does. Try fishing out what the client values in a product and use that to your advantage.

Explain to the customer the ways in which the competing products lack the specific features that the client values, while your product has them. This is a logical explanation behind your prices being higher, as you offer a higher-quality product that satisfies the customer’s need to a greater extent. You will be successful if it really is the functionality that the client values.

However, if money plays the decisive role in all of this, educate the client on their opportunities to lower the price. These may vary depending on the type of business you own and may include referral programs, special events, newsletter subscription discounts, and so on. Do not immediately succumb to their demand for a discount, and don’t stress too much about their decision to leave. It’s a free market, and there will always be someone “better” for a specific customer.

Summary: Figure out who you are being compared to and educate the client on why your product costs more. If it is only the price the client is unhappy with, teach about their opportunities to make it lower without outright satisfying their demand.

You may encounter a client who has an extremely limited budget but is really interested in purchasing your product. It is commendable that they reached out, and that is also ground for communication.

Strategy: the client is open to negotiations from the get-go, which is huge. Find out how much the client can spend on your product. If the discrepancy with the official price is not that big and does not affect your business that much, try coming to a compromise. In the future, their budget will likely increase and they will be able to afford your product, but the gratitude for past agility will persist. View this as an investment in your reputation since this client is highly likely to tell their friends about your flexible and kind company.

Nevertheless, do not forget to set boundaries during negotiations. Sure, a one-time 10-dollar discount may be fine for now, but it may not be in the future. Communicate that next time the terms of the agreement will likely change and you cannot keep running at a loss forever. This way, the customer is motivated to at least save enough money in order to afford the full cost of the product for future purchases.

Summary: if your business can afford it, sure, go through with the agreement. However, communicate that this may be a one-time offer and that you have boundaries. If a client does not respect your boundaries, they are not your client.

This is a special type of customer, since they are usually the ones that need your support the most. The vast majority of non-profit organizations do not earn any money from their work and are thus in constant search for sponsors and investors. And, to be honest, among the aforementioned customers, charities and volunteers are probably the most deserving of a discount so that they can continue with their mission of helping those who are struggling in life.

Strategy: Your company should have a policy for such non-profit organizations and how they go about supporting them. Usually, it’s a two-way street: your company provides financial support or discounts, the non-profit organization lists you as a sponsor, or it expresses public gratitude for your help on their social media or during their events. This is also a good investment in the image of your business, since by supporting charities and volunteers, you show that you care about the bigger things. This acts as an image and reputation boost and may attract new customers.

Summary: work with non-profit organizations in a mutually beneficial way. You provide them with a discount or sponsorship; they provide you with media coverage and a public image boost.

Yeah, not that pleasant one, this type. They seem loyal, but in reality they just try milking your generosity and take advantage of your orientation toward customer support.

Strategy: keep telling them about the ways they can earn discounts if your company provides any. Do not immediately satisfy their every request—it’s a vicious cycle for the company. They may just be energy vampires for the customer support employees by constantly threatening to leave the company or something else. It’s just hot air, usually. Treat such clients like you would a child: acknowledge their emotions, be understanding and respectful; you agree that this world is cruel and unfair, but the situation is just out of your area of responsibility. The evil bosses won’t let you give this customer a discount *pout*.

Summary: acknowledge their existence but generally ignore their unreasonable requests. Just keep telling them about your discount programs.

At times it feels like everything that could go wrong did. A filthy seagull stole the customer’s money, and now the client has to file for bankruptcy. Their dog went into labor, and the vet turned out to be expensive. The angry boss penalized the client for being one minute late, and now they are facing eviction. Everything goes wrong for them all the time.

Strategy: just follow your gut feeling if you value this client and believe them, honestly. Try helping and perhaps reaching an agreement at least for future payments. Karma bonuses and positive reviews await; now you definitely won’t be reincarnated as a slug.

Summary: yeah… they’re probably just broke

Some people just can’t get enough discounts. Always be as precise as possible when telling the person, the exact reason they got a discount and that it is not permanent by any means. If you fail to do so and set a boundary, you risk:
- attracting clients that constantly demand benefits and try threatening to opt for other companies. You probably will lose this battle after a while...
- having misunderstandings with the clients and leaving them confused and disappointed. I mean, they got what they wanted yesterday; why can’t that happen today as well? At this point, you’ve already lost them pretty much.

Try being understanding but firm. Explain the agreement in detail and set the client’s expectations for the future payments regarding the discount that they received.

Here we are going to provide you and your team with some generally useful tips.

Discuss in advance with your colleagues what the course of action is regarding each possible encounter. Everyone should be on the same page about what they are going to do if someone comes asking for a discount. This is important in order to avoid miscommunication between the employees and the customers, as well as setting appropriate expectations regarding the benefits that the company can afford to provide. Breaking promises of discounts risks reputational and financial losses that may be much greater than actually agreeing to the discount. Make sure your team is precise about which requests they can and cannot accommodate.

Keep track of your clients’ behavior afterwards. If their demand for a discount was satisfied, did they come back asking for more, leave a positive review, reach out for a partnership, anything? In case you denied their request, did they leave or remain loyal? Did they leave any negative reviews? Find out the way to handle discounts that is the most profitable for both your company and the customers.

There are other ways of providing your customers with ways of saving money that will not be nearly as damaging as outright personal discounts. For example, you can offer free shipping for orders above a certain price. Of course, look into running sales so that you get an influx of customers before major holidays, for example. There is a plethora of ways to earn more by charging less; figure out what suits your business the best.

Trial and error are integral parts of any business; don’t be afraid to lose customers for the sake of long-term profits and appreciate those who are loyal to you.