#016 Using Discounts

Mike Gallardo
July 14, 2024 • Estimated Reading Time: 5 minutes

July 14th, 2024

A Mike G Production

Song of The Week:

Still D.R.E. by Dr. D.R.E. and Snoop Dog (explicit lyrics)

This song never gets old.

Agenda:

1) Discounting Every Deal

My strategy for discounting in this environment.

2) Training Video

A deeper walkthrough on how I think about pricing and winning competitive deals.

First Things First

The current selling environment is not great.

A lot of people preach “selling value” and discounting a little bit (5% to 10%) or not discounting your product at all.

I think that works in bull markets, when companies have a lot of cash to spend and there’s little scrutiny over purchases — but that’s simply not the environment we’re in right now.

Instead, companies are looking to reduce software spend and your competitors are getting desperate and dropping their prices significantly.

All good.

We just gotta change our strategy a little bit.

Know Your Competitors

The first thing you need to do is understand (deeply) how your competitors are pricing their product and what terms they’re offering prospects.

For example:

30% discount 1 year agreement
50% discount pay as you go (PAYG)

Those are two completely different scenarios.

And if you don’t know that then you’re risking coming in with price/terms that are so far off the result is getting ghosted and the prospect simply going with your competitor.

Be Explicit About Discounts

Do not just share your list price and see what happens.

This is one of the best ways to get ghosted.

Let your prospect know you’ll be putting together a proposal that will include a discount — This can happen as early as the first call.

Hey Sally,

I really enjoyed our conversation today.

And I’m excited with how we can specifically help with [insert specifics].

Based on that Ok if I recommend some next steps for us?

1. A deeper dive into X so we can really evaluate how we’ll help with [priority].

2. A walk through of a pricing proposal that will include a discount. I see the potential of our partnership so I’ll work with my finance team to get something you’ll be excited about.

Do you have your calendar open?

Be Sharp With Price and Terms

Situation 1:

Your competitor prices at $50 per person per month on a 1 year agreement.

Then come in at $60 per person per month on a 1 year agreement.

Situation 2:

Your competitor prices at $50 per person per month pay as you go.

Then come in with two offers:

$50 per person per month on a 1 year agreement.
$60 per person per month pay as you go.

The most important thing is to come in with a competitive offer that is in the ball park of your competitors.

In either of those deals if you start at $100 you increase the risk of getting ghosted and the prospect simply going with your competitor because you’re “so far off” it’s not even worth a conversation.

This happens more than you think.

Just review your close/lost to see what I mean.

Quick Video

Check out this video for more details on how I think about discounting, terms and winning competitive deals in today’s environment.

Alright, that’s it for me my friends!

See y’all soon!

- Mike G

When you’re ready…

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