Field Note

They asked for 15% off. What are you buying with it?

Every point off the price buys something. The question is whether you got it.

Sellers think of a discount as a concession. I'd think of it as a purchase, because that's how the customer thinks of it. Up to about 5% off is normal negotiation and nobody remembers it. Between 5 and 15% is real money, and it should buy something specific: a signature date, a bigger scope, a multi-year term, a reference you can use. Above 15% you're paying for a decision, so make sure a decision is what you're getting, this quarter, in writing. Above 25%, in my experience, you're paying to be liked, and the customer will remember the number rather than the gesture.

Two things worth knowing before the conversation. The discount comes out of your commission at exactly the rate it comes out of revenue, so 15% off is a 15% pay cut on that deal. And it comes out of the company's margin faster than that, because the cost of delivering the thing doesn't drop when the price does.

The last question is the one I'd ask first: is the objection the price, or the deal? A discount fixes exactly one of those, and it isn't usually the one you have.

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Discount Check shows what the discount costs you and the company before you agree to it.

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Mark Flournoy

Made by Mark.

I carried a number, managed the people who did, and led partner sales teams at AWS. I make these because they're the things I wish we'd had. If a check isn't enough, I'm happy to look at the real thing with you.