Have you ever felt frustrated because after all of the work you have done to generate leads, the sales numbers still did not work out as well as you expected? Have you ever questioned why your sales reps can’t close the deals, when all the information they need was already delivered to them? Have you ever blamed your sales team for hitting their quota at the cost of over-discounting?
According to McKinsey research, a 1-percent increase in price can lead to an 8-percent increase in operating profit, provided that sales volume is unchanged. However, with the intense price pressure in today’s B2B selling, is there an easier way to improve profitability?
Generally speaking, most business owners hate discounting. Why would you want to discount if that means slashing your own margin? Nevertheless, this is still one of the most common tactics to drive sales by far, and it is therefore extremely important that it is managed in the right way.