February 10, 2023 / Papanastasiou Pantelis

The Importance of Discounts in Business

Discount Strategy.


What is the Discount?

A discount is a reduction of either an amount of money or a percentage of the regular selling price of a product or service. For example, a discount of 10 euros off the list price of a product or 10% off the list price can be offered.


Reducing prices in a business can increase customer traffic, as well as sales, but also "empty" old inventory. A business can follow the tactic of "seasonal sales" or keep some items on sale all year round. A discount can be applied to both products and services.

📌What benefits does the discount strategy have in the business... It should be noted that discounts benefit both customers and business owners.

  • Creating demand for a new product or service.
  • Strengthening the reputation of the company, store (etc.) in specific demographics.
  • Increase in cash flow.
  • Renewal of the merchandise by getting rid of the old one. Eliminate excess inventory, which can have high storage costs.
  • Maintaining and strengthening the relationship with customers.
  • Sales will bring in money to cover expenses, which helps when sales targets are set and can't be met.
  • Customer loyalty is enhanced with the discount strategy as they feel valued. He feels he has better deals.


🎯If you want to use a discount pricing strategy there are a few types of discounts from which you can choose the one that best suits your business or the services you offer.


Types of strategic discounts

Promotional discounts : offer discounts on all or some products for a limited time.

Early payment discounts: Discounts you offer customers for paying their invoices before the due date.

Seasonal Sales: Sales you can offer at the end of a season (eg winter sales).

Loyalty Discounts: Discounts that customers can receive if they spend a certain amount or make a specified number of purchases.

Referral Discounts: Discounts you offer customers for referring someone to your business.

Volume Discounts: Discounts customers receive when they buy in bulk.

source: https://www.patriotsoftware.com/blog/accounting/discount-pricing-strategy-examples-different-kinds/