Learn three best practices for Finance to enable Sales to close year-end deals without the use of heavy discounting.

We all know the famous saying, “you can’t teach an old dog new tricks”. This can be applied to the way many organizations have trained their Buyers to buy, particularly in Q4. Discounts become the primary weapon of sales reps to ensure they close those last few deals to get to their number. But for Finance, this is often the Achilles Heel of profitability metrics.

 

Download the Give Get List Guidance Tool to implement this tool immediately for your sales team to better negotiate with buyers, and to allow your reps to methodically think through different levers that can be pulled during negotiations outside of price.

 

You Are Not Alone

 

If you are realizing you have discounting malpractice within your organization, you are not alone. Just like when you bring your Canine to the local park, it’s unlikely they are the only one not listening to the orders given. In a study conducted by Harvard Business Review, 85% of respondents believed they could improve upon their pricing decisions.

 

So, here comes the big question. How do you keep sales motivated to hit their numbers without becoming overly-reliant on discounting, and thus training your Buyers the bad behavior of expecting a hefty discount at year-end? With this many organizations suffering from discounting, is this a losing battle, or is there a solution? See below for three tips to ease the pain of end-of-year discounting.

 

 

Three Tips to Fight Bad Discounting Behavior

 

  1. Sales Enablement Training

     

    Similar to your customers, reps often carry bad behaviors with them from previous organizations. They rely on discounting to close a deal because that is how they have operated and acted in the past. While it is easy, it is not always necessary.

     

    Start by launching training on negotiation tactics. Many times there is something that can be given to the customer to help close the deal that is not centered around price. Especially if the sales rep has been building consensus with the Buying Decision Team (BDT) before price comes up in the sales process.

     

  2. Creating a Deal Desk

     

    There will always be deals and customers that are deemed as strategic by Senior Leadership, and special exceptions need to be applied. While this is acceptable, it should be handled in a formalized manner. Contrary to a reps belief, not every deal and every customer is strategic. Creating a Deal Desk where a cross-functional team determines how to price and win these key deals can help mitigate these special exceptions.

     

    Need help setting up an effective Deal Desk? Review a recent SBI blog on upgrading your Deal Desk.

     

  3. Implementing a Configure, Price and Quote Solution

     

    For highly complex sales organizations, a Configure, Price and Quote (CPQ) solution may be the best long-term solution. CPQ can assist in enforcing discounting guidelines, policies, and can even tie rep compensation to Financial KPIs. When implemented correctly, a CPQ solution can even optimize discounts offered based on historical data and alignment to corporate objectives.

     

    While this may be the most effective solution, there is a time element associated here. Typical implementation of a best-in-class CPQ solution takes between 6-12 months. However, if you are playing the long game and already planning for Q4 2019, now is the time to act.

     

Don’t allow your sales organization to continue teaching your Buyers poor behaviors and engrain the expectation of a lofty Q4 discount. Begin adopting these three best practices to reach your financial profitability objectives.

 

How do you get started with these three tips? SBI has given you a head start by providing a tool for sales to implement immediately around negotiating with Buyers. This Give-Get List Guidance Tool allows reps to methodically think through different levers that can be pulled during negotiations outside of price.

 

 

Additional Content

 

Need a Pricing Strategy overhaul? Schedule a working session at SBI’s Studio with our Global Pricing Practice Leader, Jacqueline “Jacqui” Davis. Jacqui has over 20 years of experience developing go-to-market strategies and leading high-performing teams.

 

Located in Dallas, TX, our facility offers state-of-the-art meeting rooms, lounge, full-service bar, and a studio used to tape our TV shows. SBI provides the location and facilitators, all at a compelling price point.

 

As a guest of The Studio, you’ll get unlimited access to SBI’s CEO, Partners, and a handpicked team of experts.

 

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ABOUT THE AUTHOR

Adam Sheehan

Blends his background in consulting and sales to deliver a detailed analytical solution for his clients to help them make their number.

Adam has built onto his Sales and Consulting background by being involved with a wide variety of projects at SBI. Adam has designed and implement best-in-class custom Sales Processes for multiple clients. He has redesigned territories, realigned quotas, and constructed sales compensation plans to provide the best opportunity for Reps to optimize their selling time and for the client to make their number. Adam has deep experience in campaign development as well. Everything from designing and executing  multi-touch campaigns, to developing a Field Marketing strategy for a global B2B organization.

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