Posted by Lisa Hephner

Sale season has arrived…and bargain hunters abound. It seems everywhere you look prices are slashed 70%, yellow clearance signs scream out deal, and consumers are carefully considering every penny spent.

On top of the holiday spending, this is the time of year when many gift subscriptions, club memberships, and service contracts come up for renewal—and consumers are thinking about the value of each one and whether they plan to continue it, or whether they can get a better deal elsewhere.

The result is price wars that can bring an increase in sales, in conjunction with a decrease in profits because of the deep discounts. In the case of rates for year-long service contracts, the profits lost from holiday price cutting reverberate throughout the entire next year. While large businesses can absorb the declining profits, small business often cannot.

The key to winning the holiday discount game is to develop offers that provide real savings as well as real value to both your customers and to your business. The following three discount offers do just that.

Recurring Billing Discount for Scheduled Services

The Offer: Save 5% All Year When You Enroll in Recurring Billing for 2009!

The Details: By enrolling in recurring billing your customers will be billed for your services on the schedule you set (weekly, monthly, quarterly, etc.) with the amount automatically deducted from their bank account or charged to their credit card.

The Savings:

Your Customer: Saves 5% of each invoice, and saves the costs of paper checks and stamps.

Your Business: Saves the cost of printing and mailing invoices, manual reconciliation, trips to the bank, and the time value of money for late payments. It also makes the customer more “sticky’—meaning they are less likely to discontinue your service when billing is automatic and they don’t have to actively pay each month.

Learn More: To find out exactly how much your business will save with recurring billing, and thus how large a discount you can offer your customers, use the Recurring Billing Savings Calculator.

ACH Pre-Pay Discount

The Offer: Save 5% When You Pre-Pay for 2009 Service!

The Details: When your customers permit you to debit their bank account via ACH (you can have them call in, mail back a form, or pay online) for an entire year’s worth of service, you will deduct 5% from the total bill. (This offer is best for service fees that don’t fluctuate throughout the year.)

The Savings:

Your Customer: Saves 5% of the total yearly cost of your service, saves the costs of paper checks and stamps, and locks in the year-end 2008 rate for all of 2009.

Your Business: Saves the cost of printing and mailing invoices, manual reconciliation, trips to the bank, and cost of waiting for and collecting late payments Further, if your business typically gets paid via credit card, the one time ACH payment will save somewhere between 2.3% and 3.5% in processing costs. And, even if you offer a refund for early cancellation, your customer is much more likely to stay with you for the entire year.

Learn More: To help find out how much your business can save with this discount, and thus how large a discount you can offer your customers, use the ACH Savings Calculator.

Paperless Invoicing Discount

The Offer: Save $3 Per Bill When You Enroll in Paperless Invoicing for 2009!

The Details: By enrolling in paperless invoicing your customers will be emailed an invoice each month, instead of having one sent in the mail. The customer can then print the invoice and mail a check, call to make a phone payment, or click a button to pay online.

The Savings:

Your Customer: Saves $3 on each invoice

Your Business: Saves the cost of printing and mailing invoices—this will typically cover the savings offered to the customer.

Learn More: To find out exactly how much your business will save with paperless invoicing, and thus how large a discount you can offer your customers, use the Email Invoicing Savings Calculator.

Bonus Offer: If your customers typically pay you in 30+ days via mail or phone, you can offer an additional discount for Net 10 (10 days from invoice date) payment online. Your email invoices can include a “Save 2%–Pay Now” button, that transfers your customer to a pre-filled online form where they can pay via ACH or Credit Card.

You can promote these discounts on your website, on your invoices, in a special mailing or in an email. To make the offer more effective, make sure you label it a “limited time holiday offer” with a designated end date; and make sure your marketing materials have a clear call to action telling your customers exactly what to do in order to take advantage of the discount.

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