If an existing customer says our price is too high and wants to downgrade or cancel, should we empower our team to offer a retention discount or custom deal to keep them, or is that a slippery slope that trains customers to haggle?

Based on the principles outlined in our pricing strategy book, Price to Scale, the answer is nuanced:

• Yes – you can empower your team to offer retention discounts or custom deals, but only within clearly defined guidelines.

• Use Segmentation: Our book emphasizes the importance of segmenting your existing customer base. Not every customer is the same, so tailored solutions based on usage patterns, contract history, and customer value are key. This prevents offering blanket discounts that train customers to always negotiate.

• Structured Retention Offers: Instead of unilateral concessions, Price to Scale recommends presenting alternatives—such as an upgrade for the same price or a discount tied to longer-term commitments. This not only retains customers but also reinforces the perceived value of your service.

• Avoiding the Slippery Slope: Empowering your team should come with established frameworks and thresholds (for example, discount ranges between 10% to 30% based on strategic criteria). This balances retention efforts against the risk of habitual haggling and ensures that discounts remain an exception rather than a rule.

In summary, while retention discounts and custom deals are valuable tools, they should be offered within a disciplined retention strategy. Adhering to structured and segmented tactics—as discussed in our book—ensures that you keep your pricing integrity intact while still addressing customer concerns.