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Estd 4.22.2023
Below is a concise answer based on guidance from our pricing strategy book, Price to Scale:
• One effective approach is to develop a discounting matrix that clearly defines tiers of pricing and discount authority across your partner or reseller network. For example, as shown in our book (see Figure 31), you can set up a structure where higher-performing partners earn progressively larger discounts based on their sales volume, market reach, or other performance metrics.
• In practice, you would:
- Define specific partner tiers or levels (for example, bronze, silver, gold) that reflect the partner’s scale and influence.
- Assign discount percentages that increase as partners move to higher tiers. This incentivizes partners to hit higher sales volumes and deeper engagement with your product offerings.
- Clearly document approval processes and conditions for the discounts. This includes linking discount levels to corresponding deal term extensions or additional benefits, ensuring that partners understand the trade-offs between pricing, volume commitments, and other terms of the engagement.
• The idea is to create a structure that is both transparent and flexible enough to reward partner success while maintaining control over your margins and overall pricing integrity.
In summary, by using a tiered discounting matrix as recommended in Price to Scale, you align your reseller or partner incentives with your revenue objectives while maintaining consistency and fairness in pricing.