Discounting is one of the most abused levers in B2B pricing. It feels tactical, harmless, even helpful—especially at quarter-end. But poorly handled, it distorts buyer expectations, drags out sales cycles, and quietly erodes revenue quality.
The problem isn’t discounts themselves. It’s lazy or reactive discounting.
In some cases, they absolutely work:
- When timing is the true blocker, budget’s approved but tied to fiscal cycles, for instance; a modest, time bound discount can nudge the deal over the line.
- When you’re expanding inside an account and want to reward loyalty without encouraging gaming, targeted expansion incentives make sense.
- When the discount is clearly exchanged for value; public logos, case studies, early access feedback, it’s a trade, not a giveaway.
But discounting fails when:
- It becomes predictable. If buyers know you’ll drop 20% with a little pressure, they’ll wait you out.
- It creates internal price inconsistency. Nothing breaks trust faster than two accounts comparing invoices.
- It signals weakness. A discount with no clear reason smells like desperation—especially in high-trust, high-ticket deals.
Worse still, discounts can anchor your price perception in the wrong place. You might close deals faster this quarter, only to fight uphill next year when you try to raise prices or justify full value.
The right pricing experiment doesn’t just test conversion, it tests behaviour. Are buyers moving faster, committing more, or referring others? Or are they just buying cheaper?
If the answer is the latter, it’s not a pricing win. It’s a margin leak in disguise.
Discounts are fine. But they’re not free. Treat them as strategic instruments, not shortcuts.
Leave a Reply