Decrease Your Discounts: Six Ways to Make More Margin

Decrease Your Discounts: Six Ways to Make More Margin

Many salespeople believe that they must discount to get the deal. If they don’t offer a better price, the customer will go to the competitor. That’s not necessarily true.

The problem with offering customers discounts is they come to expect them and they want a deeper discount the next time.

Every deal must to be profitable or strategic. No exceptions.

Every sale needs to be profitable or strategic: that is you’re making money or increasing the long term value of a customer relationship.

The reason for discounting is to either steal a deal away from the competitor, increasing the value of the customer’s relationship with you, or to increase the sales volume to generate additional cash flow or to take advantage of production efficiencies.

Read on to learn six ways how you can decrease discounts and increase sales.

Make Customers Earn the Discount

Sales people often make the mistake of saying, “I can give you a discount.” The problem with the word, “give” is that the discount becomes a “gift” and there’s no strings attached. It degrades the impact of the discount and requires nothing from the customer in return.

Stop saying to customers, “I can give you…”

Instead, when asked for a discount, tell them how to earn it. “When you buy 10 units, you’ll earned a five percent discount.”

If they want more discount, they can earn it by buying more.

Increase Value Instead of Discounting

A better approach is to hold your price firm and add value. What can you throw in that sweetens the deal, adds value for your customer, and helps you sell more of what you’ve got?

A good deal sweetener is something your customer hasn’t bought before that you want to introduce to them. You get the double benefit of closing the current deal and setting up the next purchase.

Every sales pro needs deal in their pocket.

Another way to add value is throw in something you’ve got lots of that you want to move. You get to move old inventory and keep the full price on the original product.

Don’t toss in anything that is scarce, costs you lots to deliver, or is of high value to your customer. There’s no reason to discount things people want.

Make sure that your customer knows the full value of what you’re adding to sweeten the deal so that they understand the value they’re getting.

Bundle Up

Offer a better deal on a the bundle then on the individual items. This works well when you can bundle a product together with an item sporting a higher margin.

Bundles move up the size of the sale to you and increases the value to your customer, so everyone wins.

What else do they need? Bundle it in.

“I won’t discount just the gallon of paint, but buy this set of brushes and I’ll knock five percent off the whole lot.”

Ideally, bundles bring together everything that your customer needs to solve their problem so that the deal delivers convenience and success.

Buy More, Get More

A great way to increase your sales is to offer a better deal on a larger quantity or on a bigger order. You’ve probably seen this at grocery stores: $0.99 each or 3 for $2.49.

The rationale is that the price includes the cost of sales, shipping, handling, marketing, and so forth so when one customer purchases more, there are fewer of these costs associated with that one purchase.

To increase sales, set your discount threshold slightly higher than the average sale.

You also can offer more value at a purchase quantity threshold. For example, when ordering online, for purchases less than $49, you pay for shipping. Buy more and get free shipping.

Credit for Next Purchase

Offer a credit your customer can use on the next purchase. This method holds the price today but offers a deal on a future purchase.

“When you buy today, you’ll earn a 5 percent credit towards your next purchase that you can use anytime other than today.”

It’s often worth a small to get customers coming back.

It’s a way to allow the customer to perceived that they’re getting a deal without impacting the perceived price and associated value and impacting your margin.

Ultimately you only forgo the margin on the credit amount instead of giving up the whole amount, and you keep all of your margin today. Plus the customer has to come back to claim their discount.

Put an expiration date on the credit so that your customer will purchase sooner than later, adding to your short-term sales volume.


Rebates can help protect your price by making customers apply for a discount.

After the purchase, customers complete an on-line or mailed-in information form with proof of purchase to receive a rebate, often in the form of a gift card, a check, or a discount coupon.

Rebates feel like a deal in the moment, and you keep all the margin, today.

There are four advantages to rebates:

  1. Customers pay full price, psychologically agreeing to that price point.
  2. With the rebate form you collect additional customer data that you can use for further research, sales, and marketing activities.
  3. Some customers forget or don’t care about the rebate so don’t request it, letting you keep your margin.
  4. Some customers don’t use the gift care so ultimately forgo the value of the rebate.

Make sure that you comply with locals laws regarding rebates.

Use these ideas to stop the unnecessary discounting and keep more margin.

Mark S A Smith
Working with leaders to bring in the right customers, fast.

P.S. If you’d like 15 minutes to talk about how to build your customer acquisition system, go to to set up time to talk.

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