Most B2B discount policies are upside-down, right-siding them can substantially grow your business

A common business practice is to offer new customers a discount on their first purchase. The thought is the discount encourages a prospective customer both to buy and make a large initial purchase.

It often works. But at what cost?

Some companies just toss discounts around randomly as a tactic to close a sale. Customers learn the best deals are always waiting at the end of the quarter and business year.

Discounts, special offers, and promotional pricing are all valid sales tactics. I’ve used them all and have closed sales as a result of each. What I learned in the process is most B2B companies sabotage their revenue potential with inappropriate discount strategies - the results of which are unnecessary discounting, reduced margins, and lost revenue.

New customer discounts aren’t the only problem – volume discounts are an irritant too – but they’re the greatest area of discount abuse. The greatest missed opportunity are discounts applied to existing customers.

I’m convinced most B2B discount structures are upside-down and right-siding them can substantially grow your business. That’s your opportunity. It’s one of the topics I’m covering in next week’s teleconference on building greater and more frequent repeat business.

What do you think about new customer discounts and discounts in general? Do you agree with most businesses that new customers can and should be attracted with discounts?