2017-02-08 00:00:00 Cash Flow English Learn why it may be a good idea to increase short-term cash flow by offering discounts to certain customers. https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/06/08214328/Female-and-baby-process-customer-discount-at-food-truck-window.jpg Increase Cash Flow by Offering Discounts to Specific Customers

Increase Cash Flow by Offering Discounts to Specific Customers

1 min read

There may be times when your small business needs to generate short-term cash flow to meet financial obligations, such as debt servicing or employee payroll. A great way to generate short-term cash flow is by offering custom discounts to specific customers. This may result in lower total revenue in the long term, but obtaining a percentage of that long-term revenue in the short term is better than defaulting on business obligations. You may want to offer discounts to every customer, but you might have to give up too much long-term revenue. A better way may be to analyze your customers’ transaction history. You could send a message to your top decile of loyal customers who have repeatedly purchased from you to offer them a loyalty discount on a certain product. Perhaps your sales data shows that another subset of customers only purchases when products are 25% off. You could target this select group with an even larger discount offer on a specific product, as they are more likely to buy. The key is finding the right groups of customers to offer the perfect discounts to, which should increase the likelihood of quickly triggering a sale. Decide how much long-term revenue you are comfortable with giving up to obtain a portion of it now, and start sending specific offers to specific sets of customers.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

How to Handle a Cash Flow Shortage

Knowing how to handle a cash flow shortage can be crucial to…

Read more

Cash Flow Ratio Indicates a Company's Financial Health

It’s easy to see that financial statements contain a lot of data.…

Read more

How to Avoid the Cash Flow Problems That Cause Many Small Business Failures

Cash flow problems are a common cause of small business failures because…

Read more