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Estd 4.22.2023
Based on the guidance in our saas pricing book, Price to Scale, the approach to handling discount requests involves a structured, segmented strategy rather than relying solely on a case-by-case basis. Here are the key takeaways:
• Segmented Discount Ranges:
Our framework recommends defining standard discount ranges by customer segment. For example, the book suggests:
- Commercial customers might receive discounts between 10% to 30%
- Mid-sized customers between 20% to 50%
- Enterprise customers between 30% to 70%
• Standardized Policies with Flexibility:
While these ranges offer a consistent baseline, they are meant to be adjusted based on deal specifics such as volume, contract terms, or bundled offerings. This approach provides sales teams with a predefined pricing buffer while still allowing room to creatively tailor offers (as discussed in Chapter 4 and illustrated in the discounting matrix).
• Defined Sales Authority:
The book also emphasizes limiting discounting authority through a tiered approval process. This not only helps maintain consistency but also creates a valuable sales tool that prevents unilateral concessions, ensuring that higher-level discounts are approved only when truly justified.
In summary, our methodology combines standard discount policies with strategic flexibility. By segmenting your customer base and establishing clear discount ranges and approval processes, you can handle inbound discount requests in a balanced and effective manner.