Hacker News Reader

Comment by simonsquiff | Hacker News Reader

It seems like part of the problem with procurement was not clearly illustrating that a discount had been applied after all.

PM: Well I’m going to need some kind of discount. How about 30%?

Me: As it says on our website, we don’t discount.

PM: But I’m buying 400 seats!

Me: Yes, and we already provide a nice discount for bulk orders, which is already included on the invoice and documented on the website.

I.e. he was wrong to say 'we don't discount'. The answer is actually - 'yes, I've already applied your discount. Because you are buying so many seats, you get our discount of x%. If you bought another y, you'd get z%'. Sounds like it could have been communicated better.

View on HN

It's a cognitive dissonance issue. People will perceive more value in a discount when they are clearly shown how much they would have paid without the discount, versus how much they are paying with the discount.

Think about how good it makes you feel when you paste in a coupon code during the last stage of a checkout procedure and watch the price drop to half what it was before. You can't quite believe that it has worked correctly, its that satisfying.

If you want to really milk it, write a checkout pathway with some javascript that makes the digits of the price spin round like an odometer, preferably with the sound of a slot machine paying out.

Exactly, it's as much about communication and presentation as it is about your actual business model

While this is true, it may not have placated that person. They may be evaluated on how much money they "save" by getting explicit discounts from vendors. If the discount is already baked into the price, then it may not count towards the metric the sales guy is evaluated on.

It's possible the sales guy was a jerk. It's possible the sales guy is a rational actor working inside broken incentives. It's also possible that both are true.

>Me: As it says on our website, we don’t discount.

Should, like you say, have been "we've given you an X% discount to reflect the size of your order, if you buy Y more then that will increase to Z%; how do you want to pay" ... or something like that, no?

Most likely the PM feels the need to get discounts above and beyond the standard rates - he always wants to feel that he was able to get a better deal than anyone else. You'll find people like this everywhere.

It isn't necessarily a matter of personal entitlement issues. Asking for discounts is Standard Operating Procedure. Literally. It is his job to ask for discounts. That's all the procurement department is there for: achieving a pile of requests for internal customers at the lowest possible total price. Asking for a discount never causes the price to go up. It is a totally defensible business decision to always ask.

Studious readers may note that what's good for the giant meganational corporation is also good for the individual: you don't get something if you don't ask for it.

This is the root of that whole 'rejection therapy' business that was so cool a few weeks ago.

Strongly agreed, I started asking for discounts as par for the course for my tiny company on everything. Usually of the form "we'd really like to stretch the budget on this one, can we get an extra..." and it's working a third of the time with nothing more than that.

I read that article more as being about dealing with jerks, which I don't have a good strategy for.

That's an interesting point about it never making the price go up. If there were a non-trivial chance that it caused the price to go up, do you think the haggling would be less common?

Since haggling vaguely offends my sense of how the world should work—even though I know that has no bearing on how it does work—it kinds gives me the warm fuzzies to imagine some random procurement person's expression as the price goes up every time s?he asks for a discount.

Real life constraints cause this to occur every now and again and when it does, I'm just as tickled by the spectacle as you imagine.

An example I recall was in the bad old days of CD-ROM duplication (when even small orders were still replicated in big plants because CDR's were $40 each). Prices were set by the replicators based on how full their queues were and how fast you wanted the job done. That means prices changed daily. A not so savvy PM type spent three days making a general ass of himself waffling and niggling for an additional 10% discount (beyond our regular volume discount) only to find when the order was actually entered, the replication price had doubled.

I was privileged to deliver the news. I assure you it felt every bit as good as you'd imagine.

I think your framing is better, but there's nothing wrong with saying "we don't negotiate beyond the published rates" as long as you don't mind some customers walking.

That's not it. These people want a 'special' discount 'just for them', they don't want the prices listed on the website.

Reply on news.ycombinator.com