Discount This 30%... They’ll Sign Today
Sound familiar? If you’ve spent any time in a leadership role you’ve heard this more times than there are pebbles of sand on the beach. The problem is if you approve this without knowledge of the deal and it doesn't come in (which it won’t) then you’ve lost all your leverage. The deal will keep kicking into the next month and next quarter.
Also, just to make things more fun this will happen across all your sellers. What stops another AE asking for the discount once they find out another one has gotten it? The result will be a pipeline that is an absolute mess, your weight based forecast will be totally off from your rollups. You miss the number by a small margin as well. Then you have to get in front of the Board and tell them about the pipeline and its current state… best of luck with that!
For me, I need to break deals into simple and easy to understand boxes. Once I get the lay of the land then I can start to process what is happening and what play to call. The first thing I always ask is “what are the top 3 pain points?”
This allows me to 1) understand the problems we are solving for and if we can fix it 2) what other customers we have that are similar use cases which can be referenced and 3) should we be in this deal or is this a duct tape job that is outside of our ICP.
Once I have a firm grasp on this I want to understand from the AE what the 3 things they will gain from solving this problem. If my team can explain this to me it helps tremendously. I can correlate if these are strategic gains for the customer or just tactical fixes from someone who doesn’t have true authority in the organization.
As I start to get the “Pain and Gain” into focus then I want to know what the ROI is for fixing the problem. This is really just to understand if we can quantify what we are fixing as well as protect our price point down the road. If we can prove we are saving X amount of dollars then asking for Y amount of spend is justified. Also, if we can understand A + B = C or in this case PAIN + GAIN = ROI then we have a very clear picture if this deal is winnable from a solution fit standpoint AND if we are priced appropriately.
When you see this visually it is very clear to understand the value of your deal (see below):
Now most leaders will stop here but I need a little more info to understand whether or not we should discount here. First thing is do we have a timeline established that is mutually agreed to and is it anchored to a compelling event? I want all my sellers to have this established after the first call.
The timeline allows you to understand how good of a champion you have. If they are sticking to their committed dates and if the evaluation is on schedule against the compelling event. If so then I have a lot of confidence that this will come in. I can honestly say that 100% of the deals that come to me that have “give me the discount and I’ll buy” have a terrible timeline associated to them as well as a compelling event that is weak (e.g. They needed this ASAP).
I also want to understand all the people involved in the decision making process. Who owns the budget? What department head is this under? Who are all the people in the hierarchy of that department? What are their roles in the evaluation process? Who signs? Who has the budget authority to sign? If you have a great “Sphere of Influence” and your AE can speak easily to this then you can understand if you are speaking to the right person about the “discount now” tactic.
I also want to understand who the competition is just so I know how I stack up solution vs solution as well as the economics of the 2 options they are weighing. Lastly I want to know what the Gaps are in the deal. Either from a solution standpoint or holes in our knowledge of the decision making process.
Now if you apply these visually you can see how powerful this becomes. It also helps your sellers at all levels understand how you want the deals to look. This gets everyone rowing in one direction at the same time. You’ll see a spike in forecast accuracy, closure rates as well as average selling price. You’ll also shift from “buying” deals to “selling” deals and secure better contracts. This allows you to not get into the “discount this 30% and I’ll sign” scenario.
This isn’t a declaration on abandoning your selling methodology. You should hold onto that as the source of truth for all your sales enablement training. For me this simple PAIN/GAIN analysis helps me give educated answers to help my sellers be successful. Leadership has tremendous pressure to offer the right advice all the time. This should help.
Now, we are all human and will make mistakes here and there but what you want to avoid is absolute catastrophic scenarios where you give advice on bad information or gut feelings. Leave those scenarios for Hollywood movies and use a methodical strategic minded approach on your deals.
