Offering Discounts

Why We Offer Discounts

Offering discounts and overriding posted costs can be a valuable tool for sales teams, as it can help to incentivize customers to make a purchase, and can create a sense of value and satisfaction for the customer.

In addition, it offers our business the following:

1. Flexibility: Having the ability to override prices or offer discounts provides us with the flexibility to adapt to changing market conditions or customer needs. For example, if a customer is facing financial difficulties, we may choose to offer a discount to help them out.
2. Increased sales: Offering discounts or special promotions can help us increase sales by making products or services more affordable for customers. This can be especially useful during slow periods or to clear out inventory.
3. Improved cash flow: By offering discounts, we can improve our cash flow by moving more products or services more quickly.
4. Customer retention: Offering discounts or promotions can help us retain customers by providing them with added value. When customers feel that they are getting a good deal, they may be more likely to return to the business in the future.
5. Better relationships: Offering discounts or promotions can help us build stronger relationships with our customers by showing them that they are valued and appreciated.
6. Increased foot traffic: Offering discounts or promotions can also be used as a way to bring in new customers. By offering a special deal, we can entice potential customers to come in and check out our products or services.
7. Competitive advantage: Offering discounts or special promotions can give us a competitive edge over our competitors. By offering something unique it can attract customers who would have otherwise gone to our competitors.

When We Offer Discounts

Sales reps have some autonomy in terms of offering discounts, but it is ultimately up to the company to determine the appropriate thresholds and guidelines for discounting. Sales reps should review these guidelines and policies before offering a discount, and should ensure that their discount offer is compliant and in line with the company's expectations.

You might find yourself offering a customer a discount in one of these scenarios:

1. Sales promotions or seasonal discounts: We often offer discounts to boost sales during slow periods, to clear out inventory, or as part of a promotional campaign/special event. This can be a way to attract new customers and increase visibility for the business.
2. Customer loyalty: We sometimes choose to process a discount for customers who have been loyal to the business for a certain period of time. This can be a way to reward repeat customers and incentivize repeat business.
3. New product or service launch: We may offer discounts to encourage customers to try a new product or service.
4. Special events: We may offer discounts as part of a special event, such as a birthday sale or a clearance event.
5. Targeted marketing: We may offer discounts to specific segments of our customer base, such as students or seniors, to attract a certain demographic.
6. Competitive pricing: We may offer discounts to remain competitive in the marketplace, especially if our prices are higher than our competitors.
7. Bundling: We may offer discounts on bundled products or services.
8. Early bird or pre-order discounts: We may offer discounts for customers who order in advance or before the official release date.
9. Volume discounts: We may choose to process a discount for customers who purchase a large number of products or services. This can be a way to encourage bulk buying and increase sales.
10. Group discounts: We may choose to process a discount for groups such as schools, organizations, or non-profits. This can be a way to give back to the community and foster goodwill with these groups.
11. Clearance discounts: We may choose to process a discount on clearance or end-of-life products in order to move them off the shelves and free up space for new products.

When Discounts are NOT Appropriate

While pricing overrides and discounts can be useful tools, there are certain circumstances where they may not be appropriate:

1. Legal compliance: Be aware of any laws or regulations that might prohibit certain types of pricing overrides or discounts.
2. Branding: Consider how pricing overrides or discounts might impact our brand and reputation. Offering constant discounts or low prices could lead to an impression of low quality or low-value products.
3. Financial considerations: Evaluate the financial impact of pricing overrides and discounts. Offering too many discounts or pricing overrides could negatively impact the business's bottom line.
4. Inventory Management: Consider how offering discounts or overrides on a specific product will affect the inventory and lead to overstocking or stockouts.
5. Long-term sustainability: Make sure the discount is sustainable in the long-term. They should not compromise future sales or profit margins.
6. Market analysis: Account for the market conditions and how our competitors are pricing. Offering constant discounts or overrides might not be appropriate if it's not in line with industry standards.

It is important for us to use pricing overrides and discounts strategically and carefully, taking into account all the implications that it may have on the business, and making sure it aligns with the overall business goals and objectives.

Expired Discounts

Remember that discounts are usually temporary or only available for a limited time, so be sure a discount is active before offering it to a customer.

If a customer tries to use an expired discount code, it can be a tricky situation to handle. Here are a few steps you can take to address the issue in a professional and customer-friendly manner:

1. Before denying the discount, double-check for errors, such as typos in the code, or if the discount only applies to certain products or services.
2. Apologize for any inconvenience the customer may have experienced trying to use the expired discount code.
3. Explain to the customer why the discount code has expired, and let them know that the offer is no longer available. Be transparent and honest.
4. If possible, offer the customer an alternative solution such as a different, current promotion or a similar discount. This can help to mitigate the disappointment they may be feeling.
5. Try to understand the customer's point of view and show empathy. Be courteous and professional, and try to make the best of the situation.
6. Keep records of your expired discounts, so you can refer to them and avoid future misunderstandings
7. Regardless of the outcome, make sure that your customer service is top-notch, so the customer feels supported and valued. It may not be possible to make everyone happy, but you can make the best of the situation.

Discount Application Process

Here’s how to apply a discount to a customer’s account:

1. Review the company's pricing policies and guidelines, including any rules or restrictions on offering discounts.
2. Identify the customer's needs and preferences, including their budget and timeline constraints, and any other factors that may affect their willingness to purchase.
3. Determine the appropriate discount amount, if any, based on the customer's needs and preferences, the sales stage, and the company's pricing policies and guidelines.
4. Communicate the discount offer to the customer, using clear and concise language that explains the terms and conditions of the discount.
5. Negotiate the terms and conditions of the discount with the customer, if necessary, and adjust the offer as needed to meet their needs and preferences.
6. Confirm the final discount offer with the customer, and provide any necessary instructions or guidance for applying the discount to the purchase.
7. Record and track the discount offer and any relevant details, and monitor and review its performance to identify any trends or opportunities for improvement.
8. Follow up with the customer after the discount has been applied, and provide any necessary assistance or support throughout the purchasing process.