Discount - Is it a good option to increase Sales

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Re: Discount - Is it a good option to increase Sales

#11 Postby avinash » Tue Feb 26, 2013 9:45 am

Yes, It is the right option to close the month, or to close the season.. :mrgreen:

A gradual change can be observed in the sales by using this strategy.. take the example of all the retail stores, they are bombarded with discounted sales at their season closing. The same is applicable with any organisation also, if a sales team is just close to its target, then this Discount Pricing Strategy works as a SPRINT for them.

Talking from the customer's prospective now.. In this Indian market every customer is expecting some discounts while dealing with any organisation, specially in service industry.. I remember a VP marketing of a company once said to me very decently, "" The price you told is fine, since we are Indian citizens thus we have a right to negotiate on it, what is the discount you can offer..".

There are lot of deals that are struck due to the fact that we don't offer discounts and in the month end we can close them easily by offering some..


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Joined: Thu Dec 13, 2012 4:25 pm

Re: Discount - Is it a good option to increase Sales

#12 Postby archit » Mon Feb 25, 2013 8:27 pm

This is hyper competitive era and we have very smart customers who would like to explore all possible option before taking buying decision...If your sales team is frequently asking to increase discounts this require restructuring of you pricing structure..Because this is a clear indication of customer getting same product or service in lesser price from competition.

In case of service industry it becomes even more vital because you can not convince customer until and unless he avail you service..Before availing your service he has only one option to short list vendors that is on the basis of price. May be your service offering is 10 times superior as compare to competition but he has no valid reason to trust you and even if he is taking a wrong decision based on price it will take some time for him to come back and get budgetary approval for the same service again.

Yes, Discount is not only solution to increase sales but crux of the mater is your product should be priced competitively in market. However one should always aim at differentiating his offering in eyes of customer, if you can show completely different set of of value which customer will derive after availing your services or taking product he will not talk about competition or discount.

For eg: Chairmen of Coca cola once made a statement " our competition is not Pepsi..we have to compete against water and make Coke preferred choice for customers whenever they feel thirsty" Now this is a classic case of showing different value all together to customers.

In Service industry it is very important to analyze "Customer life time value" which means we should see if a customer can give us repeated business one should not hesitate in giving very aggressive price to get the deal..because this will give you two benefits:
1)Assured business for years to come
2)Positive word of mouth

Therefore I would not say giving discount is the only option to increase sales as it depends on case to case but ya to sustain in market you should have competitive prices.

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Discount - Is it a good option to increase Sales

#13 Postby Kalpit » Mon Feb 25, 2013 4:25 pm

Everywhere we find that if targets are not being met the sales team comes with the option that let us increase discount and it shall increase the sale . Is it the right option ?

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