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Pricing 6 min read

Discounts are a leadership question, not a sales question.

When field sales gives discounts simply because they're allowed to, that isn't a sales problem. It's a leadership problem. If you don't model price discipline, you won't get it. And without it, margin quietly bleeds away.

In many B2B organizations, discounts have become an informal currency. They're used to secure meetings, close deals, and hit quarterly targets. Nobody consciously decided, "We have a discount culture." It simply developed through individual decisions that were never questioned and sales management that rewards volume but not margin.

What a discount really costs

Worked example: product with a 60% gross margin
List priceCHF 10,000
Gross profit (60%)CHF 6,000
10% discount− CHF 1,000
New gross profitCHF 5,000 (−17% profit!)
Additional volume needed to maintain the same profit+20%

A 10% discount sounds small. But it means you have to sell 20% more to generate the same profit. Most sales teams don't know this. Most managers don't communicate it.

Why discounts happen and who is really responsible

No training in defending price

If you've never learned how to defend a price, you give in. The first push from procurement leads to a discount.

Fix: Train value-based arguments and expect them to be used.

The wrong KPI system

When sales is measured on revenue rather than margin, the incentives favor discounts.

Fix: Introduce margin targets and discount approval processes.

Quarter-end thinking

Discounts peak on the last day of the quarter. Buyers know this and wait for it.

Fix: Set approval thresholds that don't loosen at quarter-end.

No deal desk or pricing owner

If every sales manager can approve discounts independently, there's no system, only case-by-case decisions.

Fix: Set clear discount thresholds and approval levels.

How to build price discipline in practice

Discount thresholds with approval levels: 0–5% sales rep approval. 5–10% team lead. 10–15% VP Sales. Above 15% CEO + Finance. No exceptions without documentation.

Deal review process: Every deal above X% discount is discussed in the weekly meeting. Why was the discount necessary? What did we get in return? What was the business case?

Treat discounts as a trade, not a gift: Every discount requires something in return: higher volume, a longer contract term, faster payment, or a reference case.

Margin reporting alongside revenue reporting: When managers see margin figures as clearly as revenue figures, the conversation changes.

"Every discount I approve as a leader says something about the value of my product. If I give in too quickly, I'm saying it's actually worth less."

What good leaders do differently

The core principle

Discount culture isn't a feature of the market. It's a feature of leadership. If you want price discipline, you have to model it, measure it, and attach consequences to it. Anything else is wishful thinking that costs margin.

Building pricing governance in your organization?

I help you establish price structures, approval processes, and price discipline in a systematic way.

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