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Re: The GenTech Sale

The parties involved in the following e-mail exchange:

Tracy, accounting staff member
Ken, the product manager
Glenda, the sales manager

At 08:52 AM July 8 Ken wrote:

Tracy,

Yesterday we received the 2nd Qtr Sales Report and Income Statement. You listed the revenue from our 6/5 sale to GenTech as $14,358.00. How was this amount determined?

I know GenTech attended our annual conference, and since they initially saw the product there, they got the special 20% conference discount. Since they purchased two copies, shouldn't the total be $15,587.00 ($9,592 for the first copy under the special 20% discount, and $5,995 for the second copy)?

Ken

At 10:32 AM July 8 Tracy wrote:

Ken,

Since GenTech attended the conference, we extended them the special 20% conference discount on both copies. So the total was $14,358.00 ($9,592 for the first copy under the special 20% discount, and $4,796 for the second copy under the special 20% discount). Hope you don't have a problem with this(?).

Tracy

At 03:25 PM July 8 Ken wrote:

Tracy,

My understanding was that only the first copy of any sale was to be offered at the special conference discount. Subsequent copies are already being deeply discounted a full 50%!!

Unfortunately, this is now water under the bridge as far as these first two copies for GenTech goes. However, they have already committed to buying another 8 or 9 copies. THERE IS TO BE NO FURTHER DISCOUNT ON THESE COPIES. Have you received their new purchase order yet? Unfortunately, they are probably under the impression that they will get the conference discount on these additional copies too. I'll have to touch base with Glenda so she can straighten all this out with them.

We need to get our act together before closing more new sales. What is the specific intent of offering a discount to conference attendees? It gets a little nebulous when we say “conference attendees receive a discount.” Does the discount extend to any organization/person the attendee is associated with? Does the purchase need to be made on the spot to qualify? Does the discount have an expiration date? Are the discounted purchases limited to one per person?

These are just some of the questions that come to mind. If some rules aren't established here this is going to bite us again. GenTech placed the order more than 3 months after the conference. Since they are buying a relatively expensive product, it isn't reasonable to expect them to purchase it on the spot. Having said that, there should be an EXPIRATION DATE for the conference discount. I would suggest 30 to 60 days after the conference. And in the future we should make it clear the discount applies only to the first copy, not to subsequent copies.

Let's establish some good guidelines so we are all on the same page. We want to avoid any future misunderstandings and maintain the good will of our customers.

Ken

At 05:15 PM July 8 Glenda wrote:

Ken,

I've been going back and forth with GenTech over this for a good while, but after making a few other concessions, I think the fires are out on this one for now.

I agree fully with your concerns. Next time we offer something like this, let's spend a few minutes thinking it through first. Shouldn't take all that long— you came up with a great list of questions to consider. I'm sure that would take a lot less time than all this has!

Glenda

We need not dwell on more precise definitions for now - there is plenty of opportunity for that in the rest of the book.1 More important is why your business should focus on business rules. I will answer that question in this part of the book.

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