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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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Based on our pricing strategy book, Price to Scale, you can prevent discount abuse while still offering flexibility through a two-pronged approach:
• Use a Structured Discounting Matrix:
– Establish clear discount ranges for each customer segment (e.g., Commercial 10–30%, Mid-sized 20–50%, Enterprise 30–70%).
– Limit discounting authority by implementing a tiered approval process across your sales hierarchy. Lower-level reps have strict limits, while higher management can approve deeper discounts. This not only prevents uncontrolled discounting but also serves as a useful sales tool by making reps aware of the boundaries.
• Offer Tailored Alternatives for Special Cases:
– Instead of offering unilateral concessions, proactively segment your customer base to develop targeted offers.
– Provide alternatives that add value—such as upgrades or bundled add-ons—especially when asking customers to commit to longer terms or additional purchases.
– Consider creating differentiated product line-ups so that discounts aren’t directly compared against standard offerings, thereby preserving perceived value.
In summary, Price to Scale advises combining disciplined rules (clear discount ranges and approval matrices) with creative, customer-focused alternatives. This balance helps maintain pricing integrity while providing the flexibility needed for special circumstances.