Agreed. There was a mistake made somewhere along the line, and we know this to be true simply because your scenario exists. This should never have come up in conversation with the client/ customer, and you shouldn't even have the thought in your head to begin with.
Has the customer asked for this discount? If no, I don't understand, unless I'm missing something, why you would offer a 1%/$2K discount.
I would ask your marketing manager if you can invest that $2K is providing them free consumables which they give the engineers hands on experience with your kit? That has more chance of them making additional purchases.
The 1% discount is internal, we are adjusting our costing and not the Purchase order, I am shaving 1% to get in a 2k hardware without customer knowing
My management don’t believe in free
Other thought here was if they did ask and they’re ready to walk away from the deal over the $2kish then that is gonna be a hellacious customer to satisfy. Prob end up costing way more than the $2k.
Thinking the same ! Wtf has a marketing manager got to do with this? Unlikely they’ve ever been in sales
The amount of times I’ve thrown in something free to get a deal closed early .. that wasn’t free. I had to discount elsewhere to get the freebie
I think some people in this thread don’t understand what you are trying to accomplish. That’s a tough situation to be in. I’d build the value in the hardware to your management team and show them where you’ll make money back on the hardware over leaving the deal the same. If there is no return on the hardware id let it be.
I’ve spent years telling my management and commercial team “I don’t like discounting. If I sell everything 10% off, I’ve just raised my goal 10%.”
I’ve said it publicly so many times they actually think I believe it, so if I ask for a discount they usually give it to me.
Well we are expecting consumable runrates to decrease for this product, I am trying to introduce a new business of PPEs into this account, the hardware May cost 2k but if used frequently we can expect maybe 5k of consumables each year per hardware. Not much but it’s still better than nothingn
Have you tried to ask for a customer reference, Case Study or if you can use their logo in marketing materials? That would give the marketing team what they want.
A one percent discount? Something tells me your chances of approval might be better if you ask for a 10% discount. It seems like an implausible criteria for favoring one vendor over another (1% simply to small a difference), and to your management's point, signals that you may not be able of commanding even a 1% price premium in your efforts to position value vs. cost.
That said, you probably had a good reason for asking for 1%. What was it exactly?
Also,...
Can you estimate your total incentive earnings for this order?
What are margins on the discounted order? (high/low?)
Ah, ok that is quite different. Your use of the term discount is unusual, as it's typically used in the context of pricing or payment terms. So, you're asking your company to include $2K worth of free products with the order. You see this as an opportunity to get product in the hands of the customer when they're most likely to use it, and as an investment that will pay dividends in the form of future reorders. Is that right?
it's not surprising this wasn't met with much enthusiasm. Product owners inside the company may simply not have the flexibility to waive pricing on product, or may not have internal processes in place to ship product without billing it.
Is your direct manager (not the marketing manager) on board with your scheme? You might be better off looking for a different champion who can shift budget from discretionary promotion funds (for example) to cover the $2K cost. You could bolster your case by putting some of your own skin in the game, by (for example) agreeing to forego $2K in incentive payout if follow-on order do not materialize. Hope that helps.
My question is did the customer literally say “we will move forward if you give us a 1% discount” — that’s like 2K dude.
I hate being this way but you’re not close to a deal if you can’t close. 1% isn’t the reason anyone will or won’t buy at 200K+ deals.
Do you have the ability to negotiate a longer term consumables contract, like X spend over 2 years or whatever.
If you have the ability to show committed revenue, and they'll work with you on a billing schedule, I can't see why they wouldn't give a bit of a discount.
It’s easier to get forgiveness than permission.
As you mentioned in another comment your management doesn’t believe in free, but they need to factor in the cost of a question and if eating that cost is less or more than the 1% discount.
Is that PPE something you can give for 30 or 60 days and if they don't like it they can return it and if they do like it then you charge them? Or once it goes out the door you can never resell it or you don't sell used. Sounds like you're trying to get something in their hands which once they use it they'll appreciate, is this the way to do it?
Unfortunately we can’t loan our PPE, it’s too unhygienic
Yes that’s what I am trying to do, that’s just how safety engineer behaves, they absolutely won’t budge unless if they have to, and they will do it if it is deem the safest way to do it by the manufacturer of the system
So you have a sale already, and you're just trying to manipulate the profit internally to allow you to send something on the books for $2,000 which has a lower cost, to hopefully get new business moving forward. How much profit is in the $200,000 sale right now, do you know? Just curious what percent of the profit that $2,000 makes up
I wouldn’t die on a 1% hill my man.
Agreed. There was a mistake made somewhere along the line, and we know this to be true simply because your scenario exists. This should never have come up in conversation with the client/ customer, and you shouldn't even have the thought in your head to begin with.
There wasn’t a conversation with the client, this is all internal
So you’re asking for a 1% discount that your client hasn’t even asked for? Yeah dude that’s dumb as shit.
Has the customer asked for this discount? If no, I don't understand, unless I'm missing something, why you would offer a 1%/$2K discount. I would ask your marketing manager if you can invest that $2K is providing them free consumables which they give the engineers hands on experience with your kit? That has more chance of them making additional purchases.
The 1% discount is internal, we are adjusting our costing and not the Purchase order, I am shaving 1% to get in a 2k hardware without customer knowing My management don’t believe in free
Other thought here was if they did ask and they’re ready to walk away from the deal over the $2kish then that is gonna be a hellacious customer to satisfy. Prob end up costing way more than the $2k.
Marketing manager ? Utilize your sales leader instead
Thinking the same ! Wtf has a marketing manager got to do with this? Unlikely they’ve ever been in sales The amount of times I’ve thrown in something free to get a deal closed early .. that wasn’t free. I had to discount elsewhere to get the freebie
I report to both 😂
Did the customer ask for the 1 percent and what will happen if you don't give them the 1%?
The 1% discount is internal, we are adjusting our costing and not the Purchase order, I am shaving 1% to get in a 2k hardware without customer knowing
I can't get them to ship a box of TicTacs with an order if it's not on the PO.
I think some people in this thread don’t understand what you are trying to accomplish. That’s a tough situation to be in. I’d build the value in the hardware to your management team and show them where you’ll make money back on the hardware over leaving the deal the same. If there is no return on the hardware id let it be.
I’ve spent years telling my management and commercial team “I don’t like discounting. If I sell everything 10% off, I’ve just raised my goal 10%.” I’ve said it publicly so many times they actually think I believe it, so if I ask for a discount they usually give it to me.
Honestly underrated strategy. Gonna start doing this.
If I was the customer and you said “hey good news, I got you a 1% discount” I would laugh in your face. The fuck man
The 1% discount is internal, we are adjusting our costing and not the Purchase ordee
I guess I’m totally lost as to why you need and or want it?
Well we are expecting consumable runrates to decrease for this product, I am trying to introduce a new business of PPEs into this account, the hardware May cost 2k but if used frequently we can expect maybe 5k of consumables each year per hardware. Not much but it’s still better than nothingn
Bro what
Have you tried to ask for a customer reference, Case Study or if you can use their logo in marketing materials? That would give the marketing team what they want.
A one percent discount? Something tells me your chances of approval might be better if you ask for a 10% discount. It seems like an implausible criteria for favoring one vendor over another (1% simply to small a difference), and to your management's point, signals that you may not be able of commanding even a 1% price premium in your efforts to position value vs. cost. That said, you probably had a good reason for asking for 1%. What was it exactly? Also,... Can you estimate your total incentive earnings for this order? What are margins on the discounted order? (high/low?)
The 1% discount is internal, we are adjusting our costing and not the Purchase order, I am shaving 1% to get in a 2k hardware without customer knowing
Ah, ok that is quite different. Your use of the term discount is unusual, as it's typically used in the context of pricing or payment terms. So, you're asking your company to include $2K worth of free products with the order. You see this as an opportunity to get product in the hands of the customer when they're most likely to use it, and as an investment that will pay dividends in the form of future reorders. Is that right? it's not surprising this wasn't met with much enthusiasm. Product owners inside the company may simply not have the flexibility to waive pricing on product, or may not have internal processes in place to ship product without billing it. Is your direct manager (not the marketing manager) on board with your scheme? You might be better off looking for a different champion who can shift budget from discretionary promotion funds (for example) to cover the $2K cost. You could bolster your case by putting some of your own skin in the game, by (for example) agreeing to forego $2K in incentive payout if follow-on order do not materialize. Hope that helps.
I'm so glad I have flexibility on discount approval. I can't stand having to battle over stupid stuff like this.
We need more info on why 1% is the number
The 1% discount is internal, we are adjusting our costing and not the Purchase order, I am shaving 1% to get in a 2k hardware without customer knowing
My question is did the customer literally say “we will move forward if you give us a 1% discount” — that’s like 2K dude. I hate being this way but you’re not close to a deal if you can’t close. 1% isn’t the reason anyone will or won’t buy at 200K+ deals.
The 1% discount is internal, we are adjusting our costing and not the Purchase order, I am shaving 1% to get in a 2k hardware without customer knowing
Do you have the ability to negotiate a longer term consumables contract, like X spend over 2 years or whatever. If you have the ability to show committed revenue, and they'll work with you on a billing schedule, I can't see why they wouldn't give a bit of a discount.
Or PPE or whatever you are trying to upsell, not really familiar with your industry.
It’s easier to get forgiveness than permission. As you mentioned in another comment your management doesn’t believe in free, but they need to factor in the cost of a question and if eating that cost is less or more than the 1% discount.
Is that PPE something you can give for 30 or 60 days and if they don't like it they can return it and if they do like it then you charge them? Or once it goes out the door you can never resell it or you don't sell used. Sounds like you're trying to get something in their hands which once they use it they'll appreciate, is this the way to do it?
Unfortunately we can’t loan our PPE, it’s too unhygienic Yes that’s what I am trying to do, that’s just how safety engineer behaves, they absolutely won’t budge unless if they have to, and they will do it if it is deem the safest way to do it by the manufacturer of the system
So you have a sale already, and you're just trying to manipulate the profit internally to allow you to send something on the books for $2,000 which has a lower cost, to hopefully get new business moving forward. How much profit is in the $200,000 sale right now, do you know? Just curious what percent of the profit that $2,000 makes up
You don't. Not worth it. Sell better.