Remember the little domestic drama about how my briefcase and laptop were stolen?

And how, to judge from my own buying behaviour, not everyone is going to downgrade to cheap and nasty just because of the recession?

Well, yes, I bought the most expensive laptop bag I came across, but…

I asked for a discount.

You’re not to know this but I’m a shrug-and-pay guy. It’s my role in life to pay full retail, so for me to ask for, let alone get, 10% off is unusual.

But what struck me was how the store projected itself. There wasn’t a sale sign anywhere. Nothing to suggest times are tough, or please make an offer. Just a confident up-market establishment selling quality goods. The sales assistant had to make a phone call to authorise my discount.

So how do you avoid creating what Seth Godin calls a “clearance sale culture”?

First, accept that while discounting is something you may never want to do, right now the alternative could be too many people walking away.

Second, don’t lower your base prices: that sends the wrong message, and everyone gets the discount, even those who don’t need it, such as me (I would have bought anyway).

Third, if someone asks for a discount, consider whether you’re prepared to “sharpen your pencil”, and by how much. Then do each deal one-to-one (everybody you agree to deal with will feel pleased with themselves and their negotiating skills).

My earlier posts emphasised the danger of slashing prices and/or under-delivering. You must be clear how much you can afford to discount, but also what for. For example, are you just trying to stop the customer from walking away, or could you negotiate a discount to secure a bigger sale? (Our own discounts work like that – on a volume basis.)

Cheers, Ian

PS One of my photographer friends used to get very frustrated by competitors who sharpen their pencils to get the deal. But it seems pretty normal commercial behaviour to me, especially if the outcome is to secure a better commitment from the client.

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