How to build a discounting policy
Without a policy, discounting is a free-for-all where the deepest discount goes to whoever asks hardest, not to the deal that earns it.
A good discounting policy makes concessions deliberate: bounded, approved, and always traded for something.
Short answer
Build a discounting policy by defining the discount bands reps can offer, requiring a give-get for every concession, tying deeper discounts to approval thresholds, and tracking discount depth over time. A clear policy protects margin, ends ad hoc discounting, and turns price concessions into something you trade for value rather than give away.
Step by step
Set discount bands
Define how much reps can discount without approval, and the tiers that require manager, director, or finance sign-off. Guardrails let reps move fast within policy.
Require a give-get
Mandate that every discount is traded for something: a longer term, a bigger commitment, a case study, a faster signature. Never discount for free.
Tie discounts to approvals
Wire the bands to approval workflows so deeper discounts automatically require the right sign-off. This enforces the policy without manual policing.
Standardize the reasons
Require reps to record why a discount was given. Consistent reason codes reveal patterns, like a competitor consistently forcing concessions.
Track discount depth
Monitor average discount by rep, segment, and quarter. Rising discount depth signals a value or pricing problem to address, not just a margin leak.
Common mistakes
Discounting with no give-get, which trains buyers to always ask for more and gives away margin for nothing.
No visibility into discount depth, so margin erodes quarter over quarter unnoticed.
How Ardovo runs this
Ardovo turns this from a slide no one opens into how the work actually happens. The stages, exit criteria, and plays live in the deal object, and Rook flags any deal that skips a step, drafts the next artifact, and keeps the data honest, so discounts follow policy and require a give-get gets followed instead of forgotten.
Frequently asked questions
What should a discounting policy include?
Defined discount bands reps can offer, approval thresholds for deeper discounts, a mandatory give-get for every concession, standardized discount reason codes, and tracking of discount depth over time. Together these turn ad hoc discounting into deliberate, bounded concessions traded for value.
What is a give-get in discounting?
A concession offered only in exchange for something of value, like a longer contract term, a larger commitment, a faster signature, or a reference. Requiring a give-get for every discount stops reps from giving away margin for free and keeps concessions earning their way into a better deal.
How do I stop margin from eroding through discounts?
Set clear discount bands with approval thresholds, require a give-get for every concession, and track discount depth by rep and segment over time. Rising discount depth usually signals a value-communication or pricing problem, so measuring it lets you fix the cause rather than just the symptom.