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Measure Your Discounts

Ed Kless - 09/29/2009

I was recently reminded of a great practice for all professional firms to get into the habit of doing, namely measuring discounts. Most firms I work with do not, but I think this is serious mistake.

I would measure discounts on all aspects of your business. For those of you who sell products in addition to services and knowledge this means measuring the amount of discounts you are giving in each area.

Many of you know I am not a big fan of measuring anything financial other than the basics, but I truly think measuring discounts will provide you with insight on how to become a better, more confident pricer.

Comments | 0 Trackbacks | Permalink | KPIs: Key Predictive Indicators Pricing on Purpose (aka Value Pricing)

Comments

mike

Ed,
Can you flesh this concept out with a story to illustrate (I haven’t had enough coffee yet - I’m not sure I know exactly what you mean by measuring discounts and how that will be useful).
Mike

Ed Kless

Sure, Mike and thanks for your comment.

The idea would be that any time you reduce your price you should book revenue at full value and then create an account where you post any reductions to price you give.

My belief is that if you see exactly how much you are lowering your price it would make you a more assertive pricer.

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