I told them doing that, however, accomplishes three things:
1.) It erodes your profits by giving away those discounts.
2.) It trains your customers to wait until the end of the quarter for good deals.
3.) It obliterates your pipeline for the next quarter.
How Do We Prevent This from Happening?
You have to have an exceptionally strong start to the quarter. When you have an exceptionally strong start to the quarter, it’s easier to accomplish your goals at the end of the quarter. I know it sounds trivial, but how do you do it? By having a heavy pipeline. You need to overweight your pipeline so that you won’t have this discounting problem. The reason why so many companies end up pushing and having a fire sale at the end of the quarter is because they did not have enough leads at the very beginning of the quarter to hit their targets easily. Make sure you are maintaining, at a minimum, 3x your pipeline at the start of every period that you’re measuring—whether it’s a month or a quarter.
I have one client that has 5x the pipeline as a result of the type of market and high market share percentage they already have. So know those numbers and make sure you start that period with an overweighted pipeline, enabling you to cruise through the end of your quarter. You’ll prevent resorting to fire sales and eroding your chances of success in the next periods.
4 responses to “3 Ways Discounting Sabotages Your Sales | Sales Strategies”
[…] the questions that make these return on investment calculators incredibly effective. It forces the sales rep to ask predetermined, deep questions about where the customer either wants to save or make […]
[…] I recently talked to a group of sales leaders. It was the last three days of their quarter and they told me, “Colleen, we have to admit: we are having a fire sale. We’re doing everything we can right now, … Read More »Original Article […]
True, planning and efficiency in Pipeline weightage by 3 x and more is a must do. Nowadays there is also a monthly closing pressure apart from quarterly, especially in B 2 C sales. Hectic & critical price comparison by the buyer/s really eats into the price margins of the seller. Hence to have a good choice among the many different buyers in the market to selectively sell with a normal and above average margin one needs to focus and build the genuine enquiries pipeline. That is completely compulsory. Thanks for your recall.
[…] too often, salespeople are complacent in their pipeline management because they think they have enough volume or number of […]