Traditional and New Forms of Discount
In the past, goods and services were offered to the customer at below the original asking price, the traditional form of giving discount. This has always worked very well and leaves the customer feeling satisfied. The business world cannot be stagnant so alternative forms of discount came into being. This allows a wider range of discounts that appeal to different consumers and so we have the early-payment discount, the “earned” discount and the multi-buy promotional discounts now.
Today, retailers make use of the multi-buy promotion discount more than the traditional percentage off discount. It has become clear that the multi-buy discounts, with its offer of buy one or two and get one free, appeal to customers and it pushes up sales to great heights. This kind of discount is possible through modern technology by cutting administration costs for the retailer and satisfied customers that become repeat buyers.
A form of discount that is popular with small businesspersons and new companies is the early-payment discount that encourages their debtors to pay their accounts promptly. This is an important business practice, as these companies do not have the financial cushion that larger and long-established businesses have to tide them over. Small companies have to be strict about the rules of early-payment discount for it to be successful.
Earned discounts act as incentives to customers, providing that they meet certain requirements. This is good business practice as it encourages customers to sign multi-period contracts and make large purchases as well as become repeat customers. This holds benefits for both customer and retailer.
