Discounting Doesn't Make You Money

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“Car Incentives Backfire On Big 3” “Rebates Can’t Halt Big 3 Sales Share Slide” were recent headlines in the Chicago Tribune.

For the past two years GM, Ford and Chrysler have been using
rebates, incentives, and Zero Percent financing to sell cars.
Unfortunately for them, the auto-buying public aren’t
motivated by these incentives any longer.


To get a car buyer’s attention they must create bigger
— and more expensive — promotions.

“The Big Three’s combined share of U.S. sales stood at just
under 60 percent in July, down from 61.6 percent a year earlier.
At the end of 2001 the market share had been 63.2 percent.

“Each point of market share represents billions of
dollars in revenue.” the Tribune reported.

American consumers are beginning to ignore discounts of $4000
or more per car. They’ve caught onto the automaker’s tricks.
GM, Ford and Chrysler have been raising their
prices to pay for these new incentives.

Furthermore, “As incentives lose their potency, they continue
to drive down the resale value of domestic vehicles and
fuel the image that the Big Three can’t compete
on quality.” the Tribune stated.

Because of this shell-game of offering sweeter deals — while at
the same time increasing prices — nobody believes the base
sticker price any longer. There is a lack of trust that
you’re getting value for your money.

When the focus is on incentives — and the “deal” — the issue of
the quality of the product or the value of the brand is
pushed aside. The only issue of concern is price.

And when your focus is on price, you’re not building a relationship
with a customer. You’re just selling a product to move it out of
inventory, but at a lower profit margin. Or perhaps at no profit.

When the customer’s looking for another automobile, the
only issue will be the cost — or deal — for the car.
There’s no customer or brand loyalty.

Everybody’s Having a Sale

As I was working on this essay, I opened the Sunday copy of the
Chicago Tribune, and found that every single
advertisement was promoting a ”’sale.”’

Lord & Taylor, which just announced a major restructuring with
many store closings, seems to be known as the department
store that has “everything” on sale. They were
offering 25 percent – 50 percent discounts.

As were Marshall Fields and Bloomingdale’s.

Carson Pirie Scott was offering their 70 percent off Yellow Dot Sale
along with 10 percent – 15 percent discount coupons.

Mattress, furniture and tire companies were
offering 0 percent financing and discounts.

Why is it that nobody can sell their products at full price?

Tiffany’s Selling Value

Tiffany & Company — on the other hand — was selling value.

Their advertisement read

“Only One Per Customer. A diamond of superlative quality and brilliance. Each
carries its own certificate, a promise of Tiffany excellence.
From $970 to $1,000,000.”

Stop Selling On Price

When the only thing that separates you from your
competition is price, you’re in trouble.

They look at you — and your competition — as
offering identical products and/or services.

There is no concern for







*Ability to solve a problem, or anything else.

Though you “may” close a sale, because you’ve the lowest price,
you don’t have a customer. You completed a transaction.

Yes, there’s a ”’big”’ difference between completing
a transaction and building a relationship.

Once your customer’s have learned that your prices
are negotiable, they’ll never pay full price again.

Instead of focusing on price, focus on the customer’s needs.
How do you do this? By asking better questions.

Ask Better Questions

Your job isn’t to get into discussions about price. Price should
be the last thing you talk about. Your job is to
find out what the customer wants.

Getting back to the auto manufactures, the better questions to be asking are:

*Why do you want a new car?

*What are you looking for in a new car?

*What are you going to be using it for?

*How long do you think you’ll keep it?

*How big is your family?

*How many hours a day will you be driving it?

*What kind of driving do you do? (Long distances or local stop and go driving.)

Depending upon the answers, the salesman can then help the customer BUY the right car.

When you’re talking with your customers, you need to find out

*What they want!

*What they need!

*What their problems are!

*What is the financial cost, or impact, to them!

*How you can help them!

Once you’ve answers to these questions, you’re better able to
show how your products or services can save the customer
time and money, or make their life easier and better.

Two Examples

Steve, one of my consulting clients, is a financial planner. One
day he sat down with a prospect and asked this question,
“What are you trying to do with your financial planning?”

For the next 45 minutes the client told him. When he had told
Steve, his goals and objectives he said, “Steve, do
you think you can help me with this.”

“Of course.” was Steve’s reply.

Since Steve started asking better questions his
business has more than doubled.

Caroline, another consulting client, owns a piping installation
company. Upon review of her sales records, we discovered
that she was closing 20 percent of her bids.

She was putting out 500 bids a year. One hundred of them
closed, and 400 didn’t. Meaning, she and her team were
spending a great deal of time, effort, energy and money
creating bids for 400 people who didn’t buy.

Talk about wasted time and wasted effort.

Caroline and her people, started asking more — and better
— questions before she ‘considered’ putting a bid together.
They were working harder to find out what the customer
wanted, and to better qualify the customer.

She was now declining to put together bids on the majority
of projects she previously would have quoted on.

As a result, she was focusing on the best opportunities and
not wasting time, effort, energy and money on marginal opportunities.

(She even discovered that many times she was being asked for
a ‘rush’ quote because the customer needed one more bid to
keep the boss happy, and justify their decision to place
the order with their preferred supplier.)

During one three-week stretch, Caroline’s company closed $1,000,000
of new business and had their best three months — May, June and
July — in the company’s history. As a reward, she’s planning
a European vacation.

Once Steve and Caroline started discussing value and quality.
And focused on solving problems, their businesses
began to grow by leaps and bounds.

Five Things To Do

Here are five things you can do to close more sales and make more money:

*Look for NEW people to call.

*Stop calling on the same OLD people over-and-over again.

*Ask great questions.

*Look for problems you can solve.

*Work with decision makers.

”’Reprinted with permission from “Jeffrey Mayer’s Newsletter. (Copyright, 2003, Jeffrey J. Mayer, To subscribe to Jeff’s free newsletter, visit:”’