This article explains how parcel networks can improve their margins thanks to a systematic and more precise management of discounts.
Sales teams often offer aggressive discounts to close contracts, resulting in an unnecessary dilution of margin. Conversely, some profitable deals are lost due to an inflexible application of the discount policy.
In order to resolve these issues, we present the pricing models commonly used by parcel networks and a typical example of profit leakage.
Then, we explain how to control discounts and leverage sales data to improve their accuracy with a typical effect of 2 to 4 points of additional EBIT.