Top performers don't discount.

“Top performers don’t discount.”

‘No’ is the best response to a request for discount:

I stole that quote from Ebsta’s latest GTM Benchmarks report (thanks Guy Rubin and team).

No discount ➡️ less negotiation time ➡️ faster deals.

🙄 How many times have you heard a Seller say “the customer says the budget is tight and asked us to reduce by 25% to get close to the competition, I think we can get away with a 15% reduction”?

💡 When I hear this, I say “why don’t we just say no?”

Customers negotiate because they believe they can. But it doesn’t have to be this way.
⛔ You don’t negotiate if you buy a new freezer from a high street store.
⛔ You don’t negotiate if you are buying AWS credits.
⛔ You don’t negotiate at a restaurant.

A founder I work closely with put it succinctly:
“Many Sellers don’t realise that the customer will pay a fair price for a product they need, rather than a low price for a competitor they don’t want”.

💵 Your pricing has to be sensible in the market and reflect the value you deliver

🤔 From there, 10% or 20% price reduction is not relevant to the value the customer gets.

😞 If the real difference in value between you and the competitor is 20% of the list price, then you are commoditised. Time to look at how you’re going to build real differentiation.

Otherwise, just say no! Politely, but firmly.

One pricing tactic I do support: offer the customer multiple options, each one of which you’re happy with, but which give them control over how they spend. For example you might offer:

1️⃣ a pay-as-you-go deal – no discount, no commitment

2️⃣ a two-year commitment to a minimum level with a reduced price per unit

3️⃣ an unlimited use licence for four years, with an agreed but increasing price per year.

It’s possible that there will be a combination of these options which is better for you and the client, which is fine, as long as you are retaining the value which is relevant to you.

Lastly, if you haven’t read the book Never Split The Difference by Chris Vos, you should. Full of great tips about how you listen and engage carefully through negotiation, without giving away what matters to you.