Discounts and concessionsSomeone told me once that this industry is driven by discounts.  I disagree.  I think this industry is driven by concessions — we just call them discounts to feel better because, inherently, we are all uncomfortable at some level talking about money.

Let’s look at these two words carefully:  

1. To deduct from a cost or price.
2. To offer for sale at a reduced price.
3. To reduce in quantity or value.
1. To acknowledge, often reluctantly, as being true, just, or proper; admit.
2. To yield or grant (a privilege or right, for example).

I’ve long felt that this industry needs a deep rooted philosophical change to thrive. And I don’t mean thrive for next year, I’m talking about longer term success. You know, so that what happened to steel, furniture & textiles doesn’t happen to the Cabinet Industry. And it has to start on the front lines. It has to start with the people who first meet the customers — whether that’s a builder, commercial, multi-family or remodel prospect. It has to start with the designers and salespeople (on a side note, it’s always been annoying to me to write “designers and salespeople,” those two words should be synonymous, but they aren’t — yet. After all, designers are salespeople too).

So, what’s the difference between discounting and conceding? A discount is a tool to use in certain situations to help a prospect get over a hurdle of doing business with you. A concession is admitting that what you are asking is, in fact, unreasonable and yielding to a prospects demands, even if it feels unfair.

Am I splitting hairs? Here are some examples of how discounting and conceding differ:

  • You get something in return for a discount, a concession gets you nothing
  • A discounts tend to be small, a concession tends to be larger
  • A discount is discussed openly and navigated through with a customer, a concession is handed over with little or no discussion
  • A discount is explored and understood, a concession is something that has to be paid, like your taxes
  • A discount can be avoided, a concession is inevitable
  • A discount is used rarely, a concession is used constantly
  • A discount sends a message that the bartering is over, a concession sends the message that it’s just begun
  • A discount is a business decision, a concession is a personal one

So you tell me: How many times has your so called “discount” actually been more of a “concession”? Do you really believe the price you are asking is fair and reasonable? Or have you accepted your “lot in life” that everything you ask for needs a built in x% concession, ahem, I mean discount, to work?

Natural born salespeople use discounts judiciously to close deals only in certain situations. They never concede. Even in this market, naturals close deals without the use of any discounts because the prospect sees what they have to offer as unique and highly valuable.

Believe it or not, naturals actually stand firm on price in certain situations.