Why should a new client get a discount?
Customers expect discounts
It is always a joy and a thrill to acquire a new customer, due to the excitement for the potential new sales.
During the negotiations for the first order, salesmen are tempted to give a discount. Just in order to avoid that the new customer should walk away from the deal as people expect to get discounts.
However should a new customer be given a discount for his first order?
The customer hasn’t proved anything as he just is making promises about the first and future orders. He hasn’t even proved to be able to pay on time.
Thus if they want a discount, it is probably better you let him walk away from the deal. If you start giving a discount on the initial order, where are you going to end up on all the subsequent orders?
If the customer really wants a discount, then you still can propose:
- A rebate for the next order in order to retain him as a customer.
- A free additional service that has a marginal higher cost price for you.
Stick to the pricelist
If there is a pricelist, then you should stick with the pricelist for a start.
Typically the price list contains volume discounts allowing granting these if he buys sufficient large quantity. If not there is no reason for giving him a discount.
If you start giving away a discount on the first order then you only can grant a bigger discount on the subsequent orders.
Only in case when there is a special offer on hand then the new customer can get this exceptional discount. These types of discounts are clearly defined and limited in time for not creating a precedent. Thus the next time he shouldn’t expect to obtain the same pricing.
The same applies to coupons which are one time events too.
Discounts
Discounts have 2 functions:
- To attract new customers with a bargain or special deal pricing
- To retain the customer as loyal customer
A new customer doesn’t deserve a discount as he only has made promises and suggestions about his future purchases and payments.
Moreover as he has gone through his B2B purchase cycle, a discount is not at the order as he had already decided upon the pricing without the additional discount.
Do you give a discount at the first purchase order?
Do you give rebates for the next order?
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