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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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To fix poor discounting practices in your SaaS business, you need a strategic approach that aligns pricing with value and establishes consistent guidelines. Here's how to address this common challenge:
1. Conduct a Discounting Analysis
Begin by analyzing your current discounting patterns:
- Review discount rates across sales teams, geographic regions, and customer segments
- Identify inconsistent discount practices that erode your average sale price (ASP)
- Evaluate how discounting impacts your overall pricing power
2. Align Pricing Strategy with GTM Motion
One of the most effective fixes is ensuring your pricing strategy matches your go-to-market approach:
- For enterprise-focused sales motions, design a pricing structure that supports higher ASPs
- Rationalize your packaging structure to eliminate confusion that leads to excessive discounting
- Implement clear pricing metrics tied to value drivers, not just seat-based licensing
3. Implement Structured Discount Guidelines
Create a framework for disciplined discounting:
- Establish tier-based discount authority levels based on deal size and strategic importance
- Develop approval workflows for discounts exceeding standard thresholds
- Create standardized discount schedules for volume purchases and multi-year commitments
4. Develop Sales Enablement Tools
Equip your sales team with the resources to sell on value rather than discounts:
- Create pricing calculators that demonstrate ROI to customers
- Provide sales enablement materials that highlight value propositions for each feature
- Implement training programs focused on value selling techniques
5. Monitor and Report on Discounting Performance
Establish ongoing measurement systems:
- Create quarterly pricing performance reports that track discounting by tier/package
- Monitor the impact of discounting on average deal size and customer retention
- Use these insights to continuously refine your pricing and discounting strategies
Case Study Results
Our strategic approach to fixing discounting problems has delivered significant results for clients:
- Increased deal sizes by 15-30% at a $30M ARR eCommerce SaaS company
- Eliminated inconsistent sales practices that were causing friction in the sales process
- Successfully aligned pricing with go-to-market strategy for multiple SaaS companies
- Achieved 100% sales team adoption of new pricing models
By implementing these structured approaches to discounting, you can transform ad-hoc practices into a strategic advantage that preserves your pricing power while still providing appropriate flexibility for sales negotiations.