Deal desk for an SME: who approves a discount or special terms

Picture a buyer who says a competitor offered five percent off. The salesperson, wanting the order, says "let me see what I can do" and rings the owner, who is in a meeting. By evening a concession has been promised that nobody decided. A small business needs a deal desk the moment two salespeople can give two different discounts to the same kind of buyer. The desk is not a department. It is a rule. Each person may offer up to a stated limit alone, the next band needs one named approver, and anything beyond goes to the owner. The request is written down and answered in a time you can keep.

Why discounts get improvised

Nobody has told the salesperson what they may offer. They guess, or promise and ask forgiveness later. Some owners then approve grudgingly. Others refuse, and the seller loses the buyer's trust in the process. Buyers learn that asking works, so everyone asks, and your margin ends up set by whoever is most anxious that week.

List every term that can bend

Price is only one. Write down each term a salesperson might give away:

• Discount on the quoted price
• Payment terms: advance, on delivery, credit days
• Delivery: free freight, a firm date, split deliveries
• Validity: holding a price longer than usual
• Returns or replacement beyond your standard
• Free samples, trials or installation above a set value

Each gets its own limit. Someone comfortable with a small price concession may be a poor judge of extending credit, which is a risk to your cash.

The ladder

Fill the limits from your own margins and cash cycle, never from another firm. A trader on thin margins and a maker with a strong brand need different ladders. A trader whose stock turns quickly may afford a longer credit limit than a maker who buys material in advance, and the two should not copy each other's levels.

Write the standing limit as a figure, in percent or rupees, and put the date it was last reviewed beside it. A limit nobody has looked at since the last price rise is probably stale, and the salesperson should be told in writing whenever it changes, with the date.

Two more rules make it work. Requests use one format: buyer, product, quantity, what they asked, what they offered in return, and what the competitor reportedly offered. And an approver who earns commission on the deal cannot approve it without a second view.

Make every concession buy something

A discount with nothing in return teaches buyers to ask again. Train the team to ask for something: a larger quantity, faster payment, a firm order date, a reference or an agreed repeat schedule. The note on holding your price gives the wording. The desk's job is to check that the trade is on the form.

Say plainly what happens when a request is refused. The salesperson should receive a reason they can repeat to the buyer, not a bare no. "We hold this price at this size, but we can look at payment on delivery" keeps the talk open. A bare refusal sends the seller back empty-handed, and promises may then get made behind the desk's back.

A cold-room builder in Thanjavur

Here is an invented example. A builder of small cold rooms and display chillers in Thanjavur, selling to florists, dairies and hotels. Three salespeople quote against each other, and the owner learns of concessions on delivery day.

The owner set a ladder. Each salesperson could give a small discount on standard models alone. Beyond that, the request went to the production head, who knew the cost of each panel and compressor. Credit beyond standard terms went to the owner and the accountant together.

The first version had a hole. It covered discount and credit, but not installation. A salesperson with no discount left to give offered free installation and a firm date to a hotel, and the installation crew was booked for weeks. The hotel was served late and relations turned cold, which the owner judged cost more than the discount would have. The owner added two lines to the ladder: free installation, owned by the production head, and delivery commitments, which could not be given without checking the crew calendar.

What the desk records

One line per request in a shared sheet: date, buyer, request, decision, approver, reason, and later whether the deal closed. Over time it shows which concessions bought orders and which only lowered the price.

Read it now and then. If nearly every request is approved, your limits may be too low or your prices too high. If few are approved and the team still wins, the ladder may be set about right.

When a desk is too much

With one salesperson who is also the owner, skip the desk. A floor price written on a card will do. If tender or rate-contract prices are fixed, the ladder governs only the terms still open to change. And if approvers take days, the ladder will be bypassed; keep answers quick or raise the salesperson's own limit. The pricing logic behind the numbers is in cost-plus or value-based pricing.

Draft the ladder on one page

List the six terms, put a limit and an approver beside each, and show it to the salespeople before it goes live. Ask which cases it misses. Deal desk services is the service that sets the limits from your margins and cash cycle, and the rest of our sales work sits under sales. To start, tell us what you need.