Effective Discounts Require a System

December 19, 2017

Effective discounts require a system

In the B2B area, the smartest price lists won’t help a bit if sales has “discounted” away everything. Those who concentrate solely on the product price and accept chaos in their discounting process will never be able to reach their profit targets. Classic discount guidelines consisting primarily of traditional volume discounts are simply no longer sophisticated enough, especially when it comes to complex business deals and top customers. Sales needs a system that suggests the right price according to the customer, market and deal situation. Ideally these price recommendations (target price, minimum price, etc.) are based on what top salespeople are able to achieve in comparable situations (peer pricing). This also increases acceptance among the sales team, as in the end, the price recommendations are based on real deals of fellow team members, not some theoretical model.

Advice of Simon-Kucher experts:
Use a simple system with clear criteria to set prices and discounts individually. To do so, apply results from your own sales team and thereby increase acceptance of the system.