A decisive factor in avoiding discounts is the early discussion of the topic, whether as a salesperson on the hotel or airline side or as a travel agent in a travel agency. Management consultant Dr. Markus Heller of Dr. Fried & Partner provides practical tips for this in the second part of his discount series for travel9.
The big challenge in tourism is that price is often seen as the major weak point from the provider’s point of view. Whether it is the competing hotel with supposedly better conditions for the buyer, the competing airline with lower fares or the online portal with discounts or cross-selling offers – the fear of the more attractive competitive price means that the own price is often mentioned too late. The fear of a better offer from competitors also leads to hasty price concessions.
Dealing with discounts is generally a management issue in order to provide sales staff with the relevant tools. Most important in this context is the attitude of the entire sales team towards its products and services. The psychological basis for a sales talk based on self-confidence can only be created with the conviction that the right offers are being sold and that the value of these services is being understood.
In addition, there must be a consensus within the company that discount demands should be politely but firmly rejected at an early stage of the sales process. In cases where discount demands from customers are maintained, a common “discount process” should be defined in the sales team. Different “escalation levels” can be defined on the basis of the different scope of action of the individual team members.
In the sense of “Good Guy – Bad Guy”, for example, the supervisor can take on the role of the rebate denier, while the shipping clerk or salesperson takes on the role of the “customer’s attorney” and offers the customer another “goodie” instead of a rebate. This can be a bottle of sparkling wine to the room on arrival or the prospect of an additional service during the holiday.
The safest way to circumvent discounts, however, is through individualised products. If all the customer’s needs and wishes are incorporated into the service configuration, the question of granting discounts hardly ever arises. Once the service has been put together in such a way that the customer no longer has the opportunity to compare it with another provider, it becomes difficult to play them off against each other.
Transparency in the price composition is no less relevant and should be encouraged by management. Here it is crucial that the customer can see how the offer price is made up. The advantage is that in the case of discount requests, instead of a price reduction, the removal of service components can be offered. If the budget is actually insufficient, the scope of services can be reduced. If, on the other hand, it is a flat-rate discount request, it is easier to dissuade the customer from his request in this way.
As in all other phases of the sales conversation, absolute product knowledge is the most important basic requirement for dealing confidently with discount demands. The threat of wanting to buy from the competition if discounts are not granted can best be counteracted by enumerating the distinguishing features of the competitive product. Thus, if the supposedly cheaper product of an alternative tour operator or service provider is put forward, the salesperson must be able to name the relevant differences.
Many studies have shown that factors such as strategic offer management or well-functioning customer relationship management form the best basis for knowing one’s own product benefits and the needs of the customer in advance of a sales talk and thus correctly assessing the customer’s willingness to pay the price and using this information in the sales talk.
The core of such a sales talk geared towards “discount avoidance” is therefore above all “tactical competence”. This is about getting the price into the conversation at the right time and giving the buyer the good feeling that the price is fair and acceptable and does not take advantage of the customer.
Rules for avoiding discounts at an early stage in practice
Recognize willingness to pay a price: Find out the basic willingness to buy with the price quotation. You have nothing to give away and only if the customer recognizes the value of the offered service, he will enjoy the product.
Offensive price communication