Discount Check
How much discount is too much?
Plug in the price and the discount to see what it costs you before you say yes.
Plug in the price and the discount to see what it costs you before you say yes.
Every point off the price is supposed to buy you something. Check whether it did.
These are rough ranges from real deals; yours may differ. Up to about 5% is normal negotiation. Nobody remembers it. Between 5 and 15% is meaningful, and it should buy something specific: a signature date, a larger scope, a reference, a multi-year term. Above 15% you're paying for a decision, so the decision had better come with it, this quarter, in writing. Above 25%, you're usually paying to be liked, and the customer will remember the number.
Two things sellers forget. The discount comes out of your commission at exactly the same rate it comes out of revenue, so a 15% discount is a 15% pay cut on that deal. And it comes out of the company's margin much faster than 15%: cost of goods doesn't move, so every dollar off the price is a dollar off the margin.
Before you discount at all, figure out whether the objection is really the price or the deal. A discount only helps with the price. They asked for 15% off walks through what to ask for in return.Useful things for the weeks when the deal, the number, or both are giving you trouble: pipeline math, a deal that went quiet, a discount request, and what to tell your manager.
I spent six years leading federal partner sales teams at Amazon, after plenty of years carrying a number myself. QuotaBird is mostly stuff I wish we'd had back then. Most of it's free. If the problem's messier than a little tool can handle, we can talk it through.
