Member Discussion

If You Lower Your Price To Win An Order, How Do You Handle It?

Whether I'm working with an integrator or a manufacturer, I always recommend to ask for something in return if you have to give a discount. If you're asking for $5 and then tell them you'll take $4 for the same thing, some clients might feel like you were trying to rip them off. If you offer the discount but in return they have to give up some features or be available to give a testimonial for your company, then it's a real partnership. If you just fold and give the discount, you might hurt your long term relationship.

However, I also accept that negotiation is part of the game and the client might not care - as long as they're getting a discount. Do you think I'm over analyzing this situation and maybe paying too much attention to the long term relationship? Sometimes customers just want a better price / service and don't value the relationship.

What do you think?

I actually like the idea of getting to give. A testimonial is an excellent idea. How would you feel about a discount in return for a long term agreement of some sort? I was not going to read this thread, but now I am glad I did. Thanks Chris.

When discounts are given to help close the project the favor should be returned with last or another look on other projects. If the customer is just looking for a lower price then offer to meet half way if the margins are nominal. The best relationships are formed with repeat business with the same source or locations. I think delivery is the most important part of the sold project. The only non risk project is one thats completed on time and payed for.

I don't see discounts playing a role in this field whatsoever. I have had an occasional client look for a discount which I will not give on principal and don't mind not getting the job because it's the job that turns out to be a pain in the ass!

If your plumber comes to your house and charges you $140 for the service, do you ask for a discount? I don't because I will most likely need him again in the future. When that day comes I don't want him doing a half ass job due to the "discount stigma" I created on his previous visit. If he offers a discount 'just because...." sure I'll take it.

If a customer is going to spend $10K he can just as easily spend up to $15K!! (I'm pretty sure all of us have personal experience doing this at one time or another even spending $15 when you had budgeted $10!!) So someone else has deeper's the same deal!!

Why would you be content earning less for the same job?

The customer needs to understand that he is already getting a great deal and that the 'deal' translates into your experience and knowledge in choosing the right solution and then performing installation in a qualified professional manner.

In addition, any future support or trouble shooting issues (and there will be some) you can guarantee service, for example, in 24hrs (1 day, 2 days..remotely...whatever).

So I say "F*%k discounting! Be more confident in yourself and creative in selling yourself / product, and then of course, follow-through!"

At the end of the day that's great service and your client hopefully will appreciate 'YOU' - the 'deal'!!

p.s. Check your bookmark, you are not in the Dealer-Only Section of the site. ;)

"Why would you be content earning less for the same job?"

Every major manufacturer offers discounts for big jobs. Does anyone think for a moment that Axis, Avigilon, Samsung, etc. just holds to their guns and refuses to lower price if they are in a competitive situation?

And this is not simply because it is a discount for quantity, though obviously that is one factor.

If you are not discounting in competitive situations, then you are going to 'leave a lot of money on the table'.

Now, perhaps the motivation is different for an integrator (service business) than a manufacturer (product business), since integrators are more scale constrained. However, any manufacturers that does not give significant discounts for large competitive jobs is going to be one that misses out on plenty of revenue and total profit.


Not overanalyzing at all. The most common example of this quid pro quo is the standard 2/10, Net 30 and his evil twin the 2% late fee.

Although it should be pointed out that this example involving credit terms, is an ideal situation, since there is a demonstrable cause and effect between the two. Someone paying early allows you to take similar discounts from you suppliers and so in the end neither of you are really giving anything away at all!

Unlike the skull-numbing variations of essentially "I'll take 5 cents off - for a nickel back", type of negotiations that tend to undermine good faith between the parties. So agreed, it can save face and money when one can propose a tit for tat that is both plausible and agreeable. Like maybe if pressed for a discount you could suggest:

  1. Ok, but I will push out your deliverable date a month, so that I can use your job when my <newbies> have down time.
  2. Ok, then you buy the <cheap thing> at <online> for <less than my cost>, you pay for shipping, and I'll charge you T&M to install it, and you're responsible for it.
  3. Ok, we'll try to use your existing <cheap stuff> and if it works great, otherwise see above.
  4. Ok, have your <non-blood sibling> do the cable runs. We'll just charge you to certify it.

I like Mr. Wilsons approach fits much better in the integrations I'm involved with. Half of my work is return business and most are at higher margins because of relationships and we get the job done right the first time. But if that same customer... end user, electrical contractor or GC calls me today and says we really want to use you for the new system can we get a little help with pricing I say absolutely and make some adjustments and close the deal. Trust me I'm in business to close deals and small adjustments to sell price works very well when needed.

EXAMPLE of where I could negociate discount

Customer tells me another vendor has proposal a similar solution coming in at $123K and asks could I beat it / match it? (my bid is $131K) Answer: Yes.... but I will try and include additional service to sweeten the deal at the higher price first, or I will try and shave something off the lower price if I'm brought there.

I like to be happy rather than content!!

I agree Richard.

Great input everyone - thank you.

If you have to lower your price, you're now bartering. Get creative - there are many things your potential customer has that would be very valuable to you. Many of these are mentioned above, but think about it. One example: a company I know was doing hte integration work for a very popular tourist destination. They wanted an extended warranty but didn't want to pay full price. The company decided to give the discounted rate in exchange for all of it's employees receiving premium access to the attraction. Instead of waiting in the typical one to two hour line, they had immediate access and received red carpet treatment. The customer saved some money, and the manufacturer increased their benefits package - think of the pride their employees had by moving their families to the front of the line and then showing off their equipment.

So, when someone asks for a discount, leave your ego at the door and think how you can benefit.

Excellent Point and one that I share. Good attition to the thread, Chris. Your example is perfect, almost priceless....literally!

Jeez my spelling "addition". Dinner time I

One example I can think of firsthand was a university customer.

We were higher than what they budgeted for the work, so they asked us if we could do it for less.

Rather than flip the table over and stomp off, one of our salesman said we could drop our per-diem rate if the Univeristy could let our crews sleep in their dorms and eat in the cafeteria for free. Since it was summer, the dorms were empty, and the cafeteria was open 24/7 anyway.

They quickly agreed that would work just fine, and we dropped cost (but no profit) by thousands.

I would've never thought of that idea, and gained some respect for a quick-thinking salesman that day.

Where is the Like button?

I don't mean to be offensive and quite often there are many correct answers to an issue; but discounting doesn't help any of us nor does the stuff in Costco and the like. And it's not per-say the stuff itself that is the problem (well, yes it is but....) it is the dirty sticker 'sale' attached to it.

Once I hear Costco coming from a client I quickly do up a 3 camera proposal for $14.9K and sleep well that night knowing I saved myself from some bs install down the road.
I used to try and explain the reasoning behind the "awesome" price at Costco. I don't even waste my time now because Costco are good at what they do so that sticker is embedded in the prospects mind never to be and
God Bless America. There truly is no other place with so much opportunity!! You can make a few bucks here just by taking your finger outta yer ass!!
Thank God there's 3 - 4 mill people in the bay area!!
[IPVM Mod Edit on non firewall-friendly words]

If it makes you feel any better take a look at Costco's Costco:

That's an easy sticker to remember...