Discounts and promotions in B2B - help or interfere?
For six months now, information about the action has been hanging at the very top of the site of one of our competitors.
Formally, there were several shares, but as soon as one ended, the next day began the next.
With minimally changed conditions.
Is this a sign of strength or weakness? Do discounts help sales in B2B or interfere?
That's what I want to talk about today.
Companies working with retail customers (B2C) have long been determined. There are a small number of brands that never make discounts. These are mainly manufacturers of clothing, bags and luxury goods such as Levis or Louis Vuitton jeans. As a rule, they have no or very few seasonal collections. So the goods will never become obsolete (the Levis 501 jeans model has been produced since the company was founded), therefore there is no reason for a sale.
All other brands arrange sales according to a long-established schedule (the main one is Christmas and New Year), as well as transferring unsold remnants to specialized discounters. True, there may not be the right model or size.
But this is not the case in the B2B business, where sales are mainly to legal entities.
Firstly, such purchases are not spontaneous. It is necessary that all stages of the sales funnel be passed (identifying a problem - finding a solution - choosing a product - budget planning).
Secondly, several people are involved in the process. For example, in our case it is:
- a business customer (a manager who wants to know what his employees are doing);
- representative of the IT department, which is engaged in implementation and testing;
- professional purchaser, coordinating the price and contract parameters.
That is, one person needs to be interested, the whole preparatory process will be carried out by another, and the price will worry the third.
Moreover, the purchaser is not interested in the business benefits that the company will receive from the implementation of the system. He doesn’t care how much labor productivity rises after the implementation of the monitoring system, he won’t benefit from the fact that loafers and pests will be revealed in the company. His bonus depends only on the size of the discount that he will knock out from the manufacturer.
And now imagine that the testing process is over, a specific system is selected, the buyer meets with its manufacturer and requires a discount on the forehead.
“No,” the manufacturer replies, “we do not give discounts.”
The buyer hesitates, tries to lower the price, threatens (gently) the purchase of another product.
But since the supplier’s discount policy is rather strict, and he cannot sabotage the purchase, he gives up.
A completely different conversation takes place when the buyer opens the manufacturer’s website and pokes a finger at the stock.
-Well, here! - he rejoices, - you give discounts. So give us!
And here begins a long and tedious trade.
Believe that the buyer will squeeze out the maximum possible. And the impossible.
And even if the promotion was, but has already ended, a discount will be required from you anyway. In an extreme case, they will say - well then we will wait for the next promotion. And what do you answer?
And it’s really bad if, like the example with which my article began, the action is carried out almost constantly.
For the buyer, this means only one thing - the initial reference for trading is not the base prices, but the prices taking into account the stock.
The logic here is simple and straightforward - "promotional" prices are always available, and now let's talk for an additional discount.
I'm not talking about the fact that the trust in a product or service that is affected by such constant discounts is not great. Since stocks are held constantly, it means a breakdown in sales, which means either the seller and the marketing are bad, or the product is terrible and useless.
Here you, for example, believe in the high quality of goods sold in the store "Everything for 40 rubles"?
Now about personal experience
Do we give discounts? Yes, we do. But!
Firstly , this always happens individually, for a fairly small number of customers.
Secondly , we almost never lower prices, but offer either additional licenses or extra time by subscription.
Thirdly, we do not offer discounts just like that. Want an extra 3 months? Buy at least 100 licenses for at least a year and pay no later than the 31st day.
And here you can already bargain. Because if buyers are usually exchanging a discount on the fact of the purchase, then in our case we will exchange additional goods (the costs of replication are not great) to fulfill certain conditions (the fact of the purchase is no longer in dispute).
Good luck with your pricing.
And in business in general :)