Tuesday, February 24, 2015

Have you fallen victim to the discount conundrum?

Rich Darby,
Chief Operating Officer
Often times, as business owners and managers in our competitive marketplace, we allow discounts to cloud our judgment. This is what I like to call “the discount conundrum.” It’s that age-old game where companies compete by offering astronomical discounts to their customers. The battle between vendors becomes about the discount itself, and the rest of the equation is ignored and pushed to the side. For example, customer service issues, delivery times and product quality.

In my opinion, I would begin by looking at the dollar savings versus the discount amount. I have been booted out of a customer’s door because I wouldn’t offer a 42% discount. I have been told Company XYZ gives me 42% and if you can’t beat that I am sorry. They were right. I couldn’t beat it. I wouldn’t open myself up to that game. On a $1,000.00 product, this individual was receiving a $420.00 discount. I was offering a very comparable product with stellar customer service, a quality product and quick turn at a price of $606.00. I was still $26.00 higher than his 42% discount, but I brought so much more to the table.  Since I wouldn’t speak the same language and dive into that deep high discount pool, I lost the sale. I couldn’t get this individual to listen to reasoning. He was geared for discount percentage based negotiations. I’m sure a lot of us reading this are shaking our heads and saying yep. I have been that person.

I would like to challenge each of you to look at your vendors’ price lists, and recalculate what items are actually costing you. Come up with a dollar figure, not just a percentage. Then, on the cases with high dollar savings, ask yourself if the customer service, quality and delivery are acceptable. If they are not, it is costing you in your customer’s satisfaction. Then, look at the vendors with similar prices of the high discount percentage folks and evaluate their customer service, quality and delivery times. It may be worth the extra dollars to get a total solution that works for you and the families you serve. Often times, you get what you pay for.

This article originally appeared in Modern Memorialization, Trigard Memorials' weekly electronic newsletter featuring information for the funeral industry. Sign up for your free subscription at http://www.trigard.com/thursdays.

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