We in Sales management have often faced a common problem of tracking and managing “Discount’s”.They are critical contributors to the Cost component in the Financial Statement.,as identification of such components, would lead to effective decision making and improve our understanding of the market, by helping us identify certain trends that help predict and control our pipeline by helping us identify the extent of discounting that needs to be provided to ensure the profitability of the company.

In addition to this I have noticed that the discount rates typically applied to different types of companies show significant differences when dealing with the Services/ Solutions industry:

Fresh Start-ups: 55% – 100%
Small Business: 40 – 60%
Middle Market: 30 – 50%
Multinational: 10 – 25%

I have also gone ahead and categorized the types of Discounts and allowances that are offered to clients for easy classification and analysis (please note this is primarily aimed at the Services/Solutions sector)

Discounts involving Payment
#Deal Discount: This is a discount when you offer when clients make a payment in full
#Partial payment discount: This is a discount when you offer when clients make a partial payment
#Seasonal discount: This is a discount when you offer based upon certain season this is quite rare in the services/solutions industry and is usually offered to B2C companies that do seasonal business.

Discounts involving quantity
#
Total quantity discount: This is a discount when you offer when clients make a bulk orders

#Partial quantity discount: This is a discount when you offer when clients make small or partial orders.











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