How to run a discount approval process
A discount approval process should route by how much margin is being given away, not by the size of the deal. In Jestor, the discount percentage on the opportunity drives the routing, so a large deal at list price moves faster than a small one at a heavy discount.
Why discount control is usually backwards
Most approval rules route by deal value. A large deal at standard pricing then requires senior approval while a small deal at forty percent off passes unnoticed.
The second case damages margin and sets a precedent the customer will expect next time.
What routing by discount depth fixes:
- Heavy discounts approved without scrutiny
- Standard priced deals delayed unnecessarily
- No record of why a discount was granted
- Precedents set that are impossible to reverse
- Margin eroding without a visible decision
Routing by discount depth
| Discount | Approver | Justification required |
|---|---|---|
| None | The rep | No |
| Small, within policy | Sales manager | Brief |
| Moderate | Commercial lead | Yes, with the reason |
| Deep | Finance or leadership | Yes, plus the alternative considered |
Bands are illustrative. Each company sets its own from its margin structure.
Step by step to implement it
- Calculate discount percentage as a formula from list and offered price.
- Route on that percentage, not on deal value.
- Require a justification above the first band.
- Record the competitive reason, where one is claimed.
- Show the rep the band before they submit, so expectations are set.
- Report discount by rep and by segment monthly.
- Review granted precedents before renewal season.
Why recording the justification matters at renewal
A discount granted for a stated reason can be revisited when that reason no longer applies. A discount granted with no recorded justification becomes the customer's expected price forever, because nobody can explain why it was given.
Why choose Jestor
In Jestor, discount percentage is a formula on the opportunity, routing reads it directly, justification can be a required field above a threshold, approvals record author and reasoning, and dashboards show discount distribution by rep, segment and period.
Frequently Asked Questions
Should approval route by deal size or discount?
By discount depth, since that is what affects margin. See jestor.com.
Why require a justification?
So the discount can be revisited when the reason no longer applies.
How do I stop precedents accumulating?
Review granted discounts before renewal, using the recorded reasons.
Video Tutorial: Step by Step
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