Does Price Slashing Positively Impact Sales Numbers?

Every year around this time, business owners (and sales managers) begin to panic. 

After all, there are fewer than two months remaining in the calendar year, which means time is running out to hit quarterly targets. And if annual sales are lagging, it’s time to put up, or shut up.

So, what are many VAR sales managers doing to ensure their teams finish the year with a bang?

Behind the scenes, they’re cracking the metaphorical whip—demanding their salespeople alter their prospecting approach, hone in on the sales-ready opportunities they can close now and do whatever is necessary to get opportunities closed before the clock strikes midnight on New Year’s Eve.

In some circumstances, that strategy is probably working. Maybe a sales manager’s team is operating with a heightened sense of urgency, focusing more acutely on actionable opportunities and delivering messaging that’s more likely to encourage prospects to take immediate action.

In most circumstances, however, the encouragement to sprint frantically to the finish likely is producing something else—a sense of desperation that, to savvy buyers, looks a lot like blood in the water. And with every panic-stricken phone call and e-mail a salesperson sends, buyers are beginning to see smoke signals that scream: Please … Just ask me for a discount!

Sick of Discounting? Change the Way You Manage Your Sales Teams

While salespeople often are blamed for engaging in haphazard discounting practices that erode precious margins and set dangerous customer expectations, they often don’t go to that extent without the support of someone above them.

In fact, throughout my career, I’ve seen numerous sales managers who have actually pushed their teams to suggest product or project discounts to prospective customers in an effort to move those opportunities from Q1 into Q4.

Does that help the business hit its Q4 targets? Maybe. But is it really a good long-term sales strategy? Absolutely not.

In fact, discounting typically accomplishes just two things: First, it reduces your pipeline for Q1, requiring a hard-core prospecting push on Jan. 1 to make your Q1 goal. Second, it teaches your customers that they should wait for you to have a fire sale. And neither of those outcomes is particularly good for the long-term health and sustainability of your company.

Focus on Needs, Challenges and Value—Not on Price

So, what should you be encouraging your sales team to focus on instead?

To move sales forward at the end of the year, you need to coach reps to build a strong business case for moving forward now, rather than waiting until Q1. For instance, you might suggest reps use messaging that sounds more like this:

Whatever the case may be, the point is to encourage your team to maintain focus on the things that matter most to their prospects right now, and deliver messaging that communicates the prospect’s time-sensitivity and value of moving forward before the year ends.

By doing that, you’ll not only save your salespeople from having to engage in brutal discounting conversations, you’ll also change the perception of your business in your customer’s mind and see more consistent, profitable sales throughout the entire year.

Kendra Lee is a top IT Seller, Prospect Attraction Expert, author of the newly released book “The Sales Magnet” and the award winning book "Selling Against the Goal" and president of KLA Group. Specializing in the IT industry, KLA Group works with companies to break in and exceed revenue objectives in the Small and Midmarket Business (SMB) segment.