Sales reps are awesome: smart, hard working, and in control of their own destiny. They also love the thrill of the hunt — whatever it takes to win the business. With such passion for winning a deal comes the desire to provide discounts. Quotes like “the client will buy if we just give a discount” or “the client really wants our stuff but can’t afford it” are common. Product should always be sold based on value, never on price.
Here are some tips for preparing a discount policy for sales reps:
- Make a discount policy right away and implement it as soon as you have a sales rep
- Never give anything without asking for something in return (e.g. we’ll provide a discount in exchange for you being a case study)
- Clearly articulate when a discount can be given and when it can’t (a policy written in advance removes emotion from a deal that’s hot and heavy)
- Provide points or units for discounts so that they are rationed by reps (e.g. X discounts for every Y deals sold)
- Consider reducing commissions even further when a discount is given (e.g. X% discount results in Y% reduction in commission)
- Outline a floor price that the deal can never go below (e.g. no more than X% discount regardless)
Discounts are a part of life unless you employ the CarMax model with no discounts at all. Most companies do allow some discounting and a discount policy should be put in place.
What else? What other tips do you have on discount policies for sales reps?