What is discounting?
When a business lowers the price of a good or service, they are discounting it. This is a smart way for businesses to reach their goals, whether they want to launch new goods or bring in more customers when business is slow. A business that lowers the price of an item tells the customer that they can save money by getting it now.
You can also use discounts to get people to buy more, whether they are new users or people you already know. For instance, some companies reward customers who buy their goods or services regularly with savings.
Discounts on sales can be given to everyone or just to specific groups, like seniors or students. People who buy a lot of something or sign up for a subscription may also get a deal.
Anyway, sales discounting is a way to handle revenue and should be used as a business strategy to reach its goals, not to get rid of old stock.
Synonyms
- Sales Discounting: Businesses offer a reduced sales price to customers as an incentive to buy.
- Discounting in CPQ: Configuring and pricing products with discounts in mind.
- CPQ Discount Schedules: Groups of discounts that can be applied to line items.
Why Give a Sale Discount?
There are a few reasons to lower the price of something right now.
Giving a product or service away for less money helps companies make more sales.
A sales lead is often interested in the product but needs a little push to make the buy. A deal can be that push.
A deal could be why a new customer decides to switch when it comes to business-to-business (B2B) and software-as-a-service (SaaS).
Discounts help businesses make more money when sales are low
Different businesses have very different slow times. Some businesses see a lot of sales during the summer (like ski and snowboard gear) or between Thanksgiving and Christmas (like software companies whose customers don’t review their budgets until the first quarter).
No matter what time of year a business is having a slow period, deals can help bring in more money during these times.
Discounting can be an excellent way to make more money in some situations. Businesses in the travel and hotel industries use discounts to bring in more money while booking tourists during their slow seasons.
Discounts make both new and old buyers want to buy more
In the world of subscriptions, one way to keep customers is to offer a discount to those who pay ahead of time for a more extended time, like six months or a year.
Some businesses also have loyalty programs where customers can earn points (or dollars spent) and use them to get a discount on their next buy.
Shopping cart desertion is another problem that a lot of businesses have. Giving customers a deal to finish their purchases is one way to stop 69.57% of shopping carts from being left empty.
It’s easy to run sales when there are discounts.
A common way to boost sales and make more money is to run sales deals. Businesses can quickly get many people to notice their goods or services by giving discounts.
Also, if the promotion works and gives the business a return on its investment (ROI), it can keep doing it and make it more prominent over time.
Costing less In the process of selling
Discounting can happen at different points in the sales process
Being Aware
The first stage of the buying choice process is when the prospect thinks about what they need or want. At this point, they are looking into what options are out there for them.
When one business sells goods to another, that other business may get volume discounts, enterprise plans and prices, and other deals only for businesses.
The “Pricing” part of their website is usually where these deals can be found.
Think about it
Once a prospect knows about a company, they start to think about it and compare their choices. This helps them narrow their search to a few companies. This is when companies might give a discount to get people to buy their goods.
For instance, if two businesses offer the same product at the same price and one gives a 10% discount, the company offering the discount is more likely to make the sale.
Some websites offer deals or promo codes at this point to help people find the right thing.
Alternative Choice
The prospect has already chosen the goods and company from which they want to buy it by this point.
Giving a price can help close the deal sometimes. For instance, if a potential customer isn’t sure whether to buy from you or a competitor, a 5–10% deal might make the difference.
Different ways to offer discounts
Businesses can get different kinds of deals. What kind of discount a business gives will rely on its goods, customers, and sales goals.
Deals and special offers on prices
Some companies give deals and price cuts just for their customers. This happens often in shopping and the hotel business (think: buy one, get one free deal, and 20% off a whole stay).
Many companies that use the subscription plan will also give customers a discount if they pay ahead of time for a long time. If you pay for software yearly instead of monthly, many businesses will give you a 10% discount.
Bundle or package stock
Any two or more goods or services that go well together can be sold at a price as a package or bundle.
This way of setting prices is popular in the tech and software industries. For example, Microsoft Office offers multiple products as a bundle, or companies will add extra features to their product and sell them at a lower price.
Deals on large orders
Many businesses give deals to customers who buy more than one item at a time. People get more significant discounts when they buy more.
This joint deal helps companies cut down on shipping costs, make more sales, and get rid of stock faster.
Businesses that want to market a product are often given wholesale prices, the best example. Another example is when a customer buys bulk from a store like Costco or Sam’s Club instead of a regular shop.
Offers that add value
Value-added deals are basically How to Give Discounts in Business-to-Business Sales 101. The customer doesn’t have to pay for an extra service or product.
People often use this deal to make a product or service seem more valuable. One example is a web service that might give you a free domain name or SSL certificate when you sign up for their plan.
Discounts for certain times of the year
Retailers often offer deals at certain times of the year or regularly. They often happen around holidays (like Black Friday, Cyber Monday, and Christmas) or seasonal changes (like clearance sales at the end of summer). They could also be caused by a change in the business that makes things more complicated for the customer.
During these times, businesses will offer special prices or deals to their customers to get them to buy more. An example of this would be a deal from a CRM software company while new features are still in beta.
Discounting on the fly
Businesses can give savings to customers who pay faster with dynamic discounting. For example, if a customer pays their bill within a specific time, the business can refund them (2/10 net 30). This deal is often used to get more cash and work with less money.
Configure-price-quote software can automate the process of giving dynamic discounts. This helps businesses keep track of their bills and make more sales.
Setting up a system for managing discounts at your business
Businesses need a method to keep track of all the different discounts. Businesses can keep track of the discount type, when it ends, and who can get it with this method.
Here are the steps you need to take to set up a discount tracking system:
- Decide what kind of deal you want to give.
- Find out what you need to do to get the deal.
- Make sure the deal ends on a specific date.
- Set up a way to keep track of and manage deals.
- Let customers know about the discount through the company website, email lists, and other marketing methods.
- Teach the sales team about the discount and how to use it.
Setting up a discount tracking system is easy if you do it right. By setting up a system, businesses can ensure they give the right deals to the right people at the right time.
How to Discount in CPQ:
CPQ software is a vital tool that can help companies automate how they discount.
CPQ discount plans and discount approval process are some words you can use.
How CPQ Can Help You Handle Discounts
Businesses that use CPQ can instantly give discounts based on things like the product being bought or the customer’s past orders.
CPQ can also help companies keep track of the discounts they offer and ensure they give each customer the correct rate. Companies that give a lot of discounts or have complicated rules for discounts, like enterprise software companies, need this kind of software.
Also, CPQ can help businesses manage the process of approving discounts. This way, companies can ensure that the right people accept all discounts before adding them to a customer’s order.
Setting up discount plans in CPQ
Here are the steps that businesses need to take to set up CPQ price terms:
- Explain the method for discounting.
- Decide who can get the deal and what the rules are.
- Set off the deal by setting off certain events.
- Set up rules and ways to get support.
- Make sure the deal ends on a specific date.
- Make the client side of things work.
- Set up the software so that the discount is applied immediately.
- Tell team members who send sales proposals about the terms of the discount.
When setting up discount schedules in CPQ, the most important thing to remember is to ensure the software is set up correctly. A business could give the wrong deal to a customer or not apply the discount if the software is not set up correctly.
Making the process of approving discounts faster in sales
The process of getting a deal can be a pain at times. This is especially important when a business has many levels of approval, like senior leadership, sales management, and product teams.
The following steps should be taken by businesses to speed up the discount acceptance process:
- Please ensure everyone on the team knows their job during the review process.
- Set up a way to keep track of and manage requests for discounts.
- Make a schedule for when things need to be approved.
- Make sure that everyone who has a stake in the deal request knows where it stands by using a way to communicate and a project management tool.
