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Discount vs. Close Rate

Discounts can be helpful when it comes to closing deals, but they're not nearly as helpful as a lot of salespeople think.

Your customer has a pain point that is large enough to lead them to look for a solution in the first place. Their willingness to pay for a solution is connected more deeply to your ability to solve that problem and less to how much of a deal they can get.

Beyond a certain percentage, a discount destroys all the work done by marketing and sales to communicate the value of the solution to that pain point.

Even if the customer ends up buying, the operating model around the deal ends up breaking after a threshold. The costs to deliver are the same, the margin just decreases.

Lower margin = lower access to resources = lower ability to deliver to customers.

This is why marketing and sales need to hold firm on pricing.

Discounts are fine as a small give. They should not be the reason deals close.

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