Discount policy is a set of internal rules determining who may grant what discount and under what conditions. Without it, price becomes a matter of an individual's negotiating skill, and the company loses both margin and credibility when customers find out about different conditions. A usable policy sets a maximum discount that requires no approval, further levels requiring a superior's sign-off, and above all the consideration in return – a discount is not given just like that, but for a longer commitment, a larger volume, payment in advance, a reference, or a simplified scope. With repeat deals it is important that the exception does not become the rule, because a discount given once will be expected again next time. It is worth tracking the average discount granted by salesperson and by segment. Published rules also make it easier for a salesperson to refuse pressure on price without appearing inflexible.
See also: Price negotiation, Margin and discount promotions, Sales quotas.
