What are some ways to disincentivize sales reps from discounting?
Let’s step back for a minute.
There are a number of ways to optimize discounting. At some point, you’ll add a true CPQ system so have a detailed, formal process around quoting and discounts. Before that, you’ll add a sales ops leader who will do it with rules. Before that, your VP of Sales will do it, sort of with rules, sort of just by winging it. And before that, it will be you 🙂
But … discounting is >> good <<, done right.
It’s a key part of every sales rep’s tool kit. It’s one of the only ways they can create a sense of urgency in a sales process.
Many CEOs, especially first-time CEOs or CEOs from a B2C background, hate discounting. They want everyone to pay the same, “fair” price. They see discounts as lost revenue.
But that’s wrong. That’s not how enterprise customers like to buy. Many want, even need, a discount. Many procurement departments require a discount.
The real art is discounting from a mark-up. To get to where you wanted to be in the first place.
Raise your prices 25% tomorrow.
And allow sales reps to discount up to 20% at their discretion.
There you go.
This alone will get you more revenue, more quickly, with less friction. Than sticking to your existing pricing and trying to stop discounting.