Tracking "Discounting" in Sales

We in Sales management have often faced a common problem of tracking and managing “Discount’s”.They are critical contributors to the Cost component in the Financial Statement.,as identification of such components, would lead to effective decision making and improve our understanding of the market, by helping us identify certain trends that help predict and control our pipeline by helping us identify the extent of discounting that needs to be provided to ensure the profitability of the company.

In addition to this I have noticed that the discount rates typically applied to different types of companies show significant differences when dealing with the Services/ Solutions industry:

Fresh Start-ups: 55% – 100%
Small Business: 40 – 60%
Middle Market: 30 – 50%
Multinational: 10 – 25%

I have also gone ahead and categorized the types of Discounts and allowances that are offered to clients for easy classification and analysis (please note this is primarily aimed at the Services/Solutions sector)

Discounts involving Payment
#Deal Discount: This is a discount when you offer when clients make a payment in full
#Partial payment discount: This is a discount when you offer when clients make a partial payment
#Seasonal discount: This is a discount when you offer based upon certain season this is quite rare in the services/solutions industry and is usually offered to B2C companies that do seasonal business.

Discounts involving quantity
#Total quantity discount: This is a discount when you offer when clients make a bulk orders
#Partial quantity discount: This is a discount when you offer when clients make small or partial orders.

If you want some perspective on how you or  your company needs to enhance their Sales/Client Management Capabilities, please email me at shubhanjan.saha@gmail.com

Metrics Matrix

To Metric matrix tool is an effective tool that may be created in order to identify, classify and design an effective sales projection dashboard, this is actually a part of a methodology to bring in a more focused business perspective to bring in a more heuristic approach to understanding sales performance which would help in aligning the business perspective with the sales performance for effective sales measurement.

This matrix combines the business perspectives along the horizontal axis with sales performance dimensions along the vertical axis. Each metric is placed in the matrix based on its most appropriate classification with respect to these dimensions.

This tool has the following benefits:

• Creates a framework around the metrics selection process

• Balances business perspectives and sales performance views

• Provides a systematic approach

• Facilitates prioritization

• Allows identification of particular areas of emphasis

• Highlights areas with no metric coverage

Sample Matrix

 

If you want some perspective on how you or  your company needs to enhance their Sales/Client Management Capabilities, please email me at shubhanjan.saha@gmail.com

Product Benefit Schematic

An easy way to portray the benefits of a product or a service is to explain the Product Benefit  Schematic in front of the  potential client, this schema is essentially a framework which would help relate the corporate objectives & the pain points that are being faced by the client with the benefits that the product would be able to provide,  while simultaneously helping the client in identifying the potential drivers and with a quantified amount of the advantage that the product is expected to provide to the potential client 
 

The structure of the schema could vary with the product but the main aim should always be towards helping the client relate the issues that he faces with the advantages that the product could provide

 If you want some perspective on how you or  your company needs to enhance their Sales/Client Management Capabilities, please email me at shubhanjan.saha@gmail.com

 

Competition Bid Comparison Matrix

A Competition Bid Comparison Matrix is a document that would assist you in identifying and keeping track of the bids that are competing with your bid, they are an essential component that would be quite useful when you are able to compare your strengths with your competitor and would provide you with a better documented approach when negotiating with a client.

The following steps are needed to be taken to prepare a Competition Bid Comparison Matrix

a. List & consolidate the key client issues that are actually the pain points which affect a client.
b. In the next column Try to assign weights to the various factors that you have identified as the client issues which affect the clients make sure the sum turns out to be 100%
c. In the following column mention the rating that you would give to the issue concerned (I usually make it out of 10, but that depends upon your decision)
d. Then add an extra column for every competitor.
e. In the last column mention a discriminator to identify if we provide an edge over the client on that issue. 

The following is an example of this Matrix:
 

 
If you want some perspective on how you or  your company needs to enhance their Sales/Client Management Capabilities, please email me at shubhanjan.saha@gmail.com