Counting the cost of discounting

14 April 2020
By BMF Training

Maximising MarginsMaximising Margin
is one of the most popular courses delivered by the BMF. Even the taster session for the course at our Members’ Conference last year was packed to the rafters, with many senior managers in attendance. The subject clearly sparked their interest, but left some wondering if it could be made even better? The answer is a resounding YES. Follow-up discussions have led to the introduction of our new Margin Development Programme designed for the whole sales team.

The original stand-alone course was usually attended by just one or two staff members. The results they could achieve were, therefore, limited if the sales and negotiating culture within the branch, and indeed the business, remained unchanged.  If the rest of the staff, including management, continued with bad habits and applied discount as usual, it could prove quite difficult for the trained team member to achieve more than limited improvement.

However, the Margin Development Programme is designed to involve all customer facing staff – from director to trade counter and telephone sales.  It is far more likely to ensure that a change of culture within the business takes place and that the required changes in behaviour in the workplace are driven home across the board. 

The programme has already resulted in tangible and measurable margin increases for the initial users. As one said: “The tutor’s experience and knowledge came through on the course. The BMF has created an essential driver to delivering both sales and margin enhancement within the merchant business, resulting in both continuous improvement and cultural change.”

The new programme can be tailored to suit individual needs, but includes essential elements to understand:

- The difference between mark-up and margin and why this is so important when pricing
- The amount of net profit that sales ultimately generate
- Customer “key drivers”
- Market reputation and differentiation
- Reasons to hold firm on pricing (and when to provide a discount)
- The Perception of Value
- Character Type Recognition
- Negotiating Styles
- The true cost of discounting

Of course, commitment and hard work will be required to ensure that improvements are maintained, but the Margin Development Programme provides support before, during and after the training element phase to help set targets, design incentive schemes, track and monitor progress, avoid common pitfalls and measure statistical success.

To find out more about the Margin Development Programme click here or please contact [email protected] or phone 02476 854980.

BMF training ranges from formal Apprenticeships and sector-specific Diplomas and a Foundation Degree in Merchant Management, to on-line product knowledge and other specialist skills training.

This article first appeared in the March 2020 edition of Professional Builders’ Merchant (PBM)