In enterprise deals, when negotiating multi-year contracts or large user counts, what kind of discount is considered reasonable to offer for the commitment (e.g., multi-year discounts or volume-based pricing breaks)?

Based on the guidelines in our pricing strategy book, Price to Scale, a few key points can help you determine a reasonable discount when negotiating enterprise deals with multi-year commitments or large user counts:

• For enterprise deals, it's common to see discounting in the range of 30% to 70%. In some cases, when dealing with very large contracts, discounting might even reach up to 80%.

• A multi-year commitment or volume-based pricing break is often structured as a trade-off: you reduce the unit price notably for larger commitments (for example, larger deals might see a unit price reduction from around $2.10 down to approximately $0.60).

• The exact percentage will depend on various factors such as the size of the contract, the level of risk, and the overall strategic objectives (e.g., promoting larger orders or securing long-term revenue).

In practice, using these discount ranges helps you balance between being competitive in your pricing and preserving the value of your product. Always consider tailoring the discount based on your customer segmentation and deal specifics, ensuring you provide a compelling offer while maintaining profitable pricing.

In summary, for enterprise deals with multi-year contracts or large volumes, a discount in the 30%–70% range is typical—with adjustments made based on specific deal dynamics and strategic considerations.

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