Discounting Tactics for Business

September 2nd, 2018

We’re in September now and everyone’s attention turns to Christmas trading and finishing the year on a high. But first, its ‘Buy British Day’ on October 1st. Between now and Christmas, there’s huge consumer pressure for discounting that’s centered on Black Friday 23rd, and Cyber Monday 26th November this year.

But what should your approach be? Should you discount and if so by how much? Whilst predominately a business to consumer (B2C) initiative and driven by on-line trading, it does impact business to business (B2B). In the early days many B2B companies jumped on the bandwagon only to fall out of favour; will it return this year?

First, you need to decide if you want to participate. If so, these questions will help focus your thoughts:

  1. What is your objective?
    –     Increase sales
    –     Generate cash
    –     Find new clients
    –     Clear out old or discontinued stock to make room for new stock?
  2. What margin do you currently make and how much are you prepared to give away? Gone are the days when a 10% discount was a big deal.
  3. How many units do you need to sell to hit your target?
  4. What is your follow up offering? How and when does that happen?

If you only sell B2B you may be able to swerve these events but then again it’s a great excuse to talk to your clients, albeit everyone will be vying for air-time! Perhaps you should prempt everyone else and do your ‘Black Friday’ discounting a couple of weeks early – that way you’ll avoid the last minute mad rush.

Whether your offer is profitable, profit neutral or loss making, you must focus on the main objective; to make additional sales after the initial offer. This is where you’ll make your money and profit, so follow-up after the event is crucial. When every new customer is added to the database (don’t forget GDPR) you can continue to market to them and make future sales.

Other Ways to Use Discounting to Add Value and Trigger a Purchase
Discounting isn’t the only option….. How about

1. Free P&P over £xx
2. A reduction or voucher for ‘slow delivery’ – not everyone wants everything ‘next day’
3. 2 for 1 or 3 for 2 or 6 for 5….
4. Longer credit terms
5. Free gift; buy this and well send you this free gift
6. A conditional offer; buy X and get Y at half price
7. A donation to charity for every ‘x’ sold before DD/MM/YY
8. Time limited offers – order by midnight and receive X
9. Percentage or pound offer? Which is more attractive 10% or £10
10. Discounts for select customer groups; students, retired, armed forces, civil service
11. Bundle several items together into a package.

Sales tactics like these don’t always prove profitable; be clear about your objectives, the up & down sides before committing to discounting. Take the time to plan out all possible scenarios – it can go very, very wrong. Remember the story of the bakery owner who gave a 75% discount on cupcakes? 8500 people placed an order for 102,000 cup cakes.

What is your favourite sales tactic?

coachSME88

Shirley Mansfield is a highly experienced business coach and Master Problem Solver. With over 25 years’ experience, she founded CoachSME in 2011 to work with business owners to maximise growth, and she is still trying to reduce the 14 handicap! Keep up to date by following me on Twitter.