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Discounting

May 2

by Spoonfed Blog

Customers often want more for less!

When a Customer asks for a discount, always be prepared. Have a script! If you don't know what to say, you'll end up conceding something you shouldn't.

You know that you work hard to produce and deliver good food reliably at a fair price. You know that you don’t make excess profits and that to provide good food and service, you have to make some money. 

Ask your customer the following…
Have you let them down? Is our food not worth it? Do they get good service? If you don’t know the answers already then you need to find them out – you may be charging too much or too little!

But what to do if a new customer comes along and says they’ll place $50,000 worth of corporate business in the next twelve months but they want 10% off standard price?

Here’s our suggestion…

1) Commercially, discounts should be a last resort - it is always, always better to offer something more - say some extra fruit in their own Menu. By doing this, you only suffer the cost of the extra items. With discounts - the whole amount comes straight off your bottom line.

2) Sometimes, in return for volume, you may have to agree to a discount but try to make this a ‘retrospective’. In other words, agree the volume of business and provide the discount at the end of the year, if, and only if, the volume is achieved – or provide a sliding scale of discount based on volume.

3) However, in the situation where you have to offer a discount on each Order, only offer it for a specific time period in return for certain volume. Document it by email – and follow up. Once a discount is in place, without commitment to volume, it’s hard to remove.

Here’s a sobering fact, if you make 10% net income or profit – and you give a 10% discount, then, on an average cost basis, you’re making no profit at all on these discounted orders.

Always aim to provide great food and great service and your Customer won’t think of asking for more for less!

Green beans

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