We’re kicking off the summer term with our next #FinnemoreFireside, this time with Derek Hills,  Director of IT, Systems and Data at Ark, a charity and network of 39 schools that aims to transform children’s lives through education.

Derek has a wealth of experience leading first-class Data and IT teams, having previously worked with other MATs including Harris Federation and David Ross Education Trust before taking up his role at Ark. He knows the MIS landscape well and we had an interesting chat about what the future of MIS might be, including topics such as:

• Where does Derek’s passion for data and analytics come from, and why does he love working in education?
• What can be achieved by sharing data, info and best practice
• Where he sees AI fitting into technology budgets and the broader education landscape
• Are schools getting enough out of their edtech and systems, and are they utilising it effectively?
• Consolidating solutions means investment can go into teaching, but what are the challenges around open data policies?
• The importance of working in partnership with suppliers and forming long-lasting relationships
• What Derek would like to see more of from edtech companies

So here we are, almost at the end of the month and most people are desperately trying to close those last few orders to meet what are probably very challenging targets.  Time to bring out the discount – that will work, surely?!  Well, not necessarily.  Here are my 4 reasons why offering a discount to close is not always a good thing:

1. It devalues your product. If what you are selling was worth, say, £5,000 two weeks ago, why is it only worth £4,500 now?  While a discount designed to get the customer to order before the end of the week might just incentivise them to do so, it is also likely to leave a lasting impression that the product was priced too high in the first place which won’t help your long-term relationship and future sales.

Which brings us on to . . .

2. You risk ‘training’ your customers to expect a discount. If a discount is usually offered towards the end of any given month, term or year then the customers will learn to expect it and wait for it to happen.  We all know how we feel about certain large out-of-town furniture and carpet stores that advertise their sales an awful lot; we wait for the sale until we buy as we know there’s probably going to be one just around the corner.

3. It’s obvious but, by discounting to close, you are lowering your revenue and margins. To hit your overall business plan, how many more sales will you now need to make?  Would it be better to take a longer-term view and aim for a smaller amount of committed long-term customers who are willing to pay the true price of your product than a larger volume of customers who bought it because it was a bargain?  It’s a question only you can answer for your business but it’s worth considering.

4. You’re no longer in control of your sale. Most companies will spend a significant amount on sales (account management and new business development) in some way, shape or form.  Those people that you hire are there to add value to your business and, by offering a discount to close, you’re moving all the control over whether or not that potential customer will order onto your client – the decision is now theirs and there is little your salespeople can do to influence.  Unfortunately what this means for the business is that you’re really not getting the best value for money from the salespeople.

Instead of offering a discount, consider how you could add value to the sale.  Is there something you could offer that not only has a financial value attached to it that your potential customer would appreciate but also helps them get the best from the product they’re buying which will increase loyalty and long-term revenue?

Don’t get me wrong, used sporadically discounts can work and sometimes it can help you launch a product with early adopters or build a preferential relationship.  However, give it some thought before you do as it may be that the long-term pain isn’t worth the short-term gain.