When to reduce price.
WHAT DISCOUNTING COSTS
Margin, directly The perception that your price is arbitrary The baseline for every future negotiation Comparison by existing customers
WHY THAT LAST POINT MATTERS
Customers discuss prices with each other.
WHEN A DISCOUNT IS DEFENSIBLE
In exchange for something of value: a longer term, upfront payment, a reference, a larger commitment.
WHAT THAT MEANS
It is a trade, not a concession.
WHEN IT IS NOT DEFENSIBLE
Because they asked To close before a deadline that is yours, not theirs Because you fear losing the deal
WHAT TO DO INSTEAD OF DISCOUNTING
Reduce scope Change payment terms Offer a shorter initial commitment Remove something they do not need
WHY THOSE PRESERVE POSITION
The price for the thing remains what it was.
WHAT TO ESTABLISH BEFORE ANY DISCOUNT
Whether the deal is worth having at the lower price.
HOW
Know your actual cost to deliver and support.
WHAT TO AVOID
Winning unprofitable customers.
WHY
They consume the capacity that would serve good ones.
WHAT TO DO IF THEY WILL ONLY BUY BELOW YOUR FLOOR
Decline, courteously.
WHAT THAT PRODUCES SOMETIMES
A return at your price.
WHAT TO RECORD
Every discount given, and why.
WHY
Patterns reveal whether your pricing is wrong.
