After bouncing around as an SDR for a couple years, I've been on the SMB new business team for my company (very old, fortune 2000) for about 7 months now. My team sells martech.
My team and division are both pretty successful in terms of quota attainment and comparitively to the other divisions/BUs in the company. Essentially, a majority of our deals that close have a perceived "discount" approved by a "pricing team" with a deadline for that price. In practice, we as reps are coming up with these, occasionally with collaboration from our manager/director.
Fairly typical stuff I think, but I see this approach get absolutely shit on on LinkedIn and anywhere else. The thing is, I think it works okay for me/us. A few details on the situation:
- I've been in the top half of the leaderboard (team of 12) every month and climbing. I'm around 100% quota attainmet thus far
- The top people on my team use it, my manager used it when he was in our seat, and our director supports it
- We markup the original quote to give ourselves room to go down. Pricing is always custom and although there are best practices, the actual quote for the same thing can vary based on how we are reading the prospect
- Actual discounts go to management, I only sparingly go that low. Others do more often
- We have a minimum order we are not allowed to go below ($5,000)
- Average deal is $7-10k roughly
There are a few reasons why I think this works okay for us and why we continue to use it
- High name/brand recognition. We are often already perceived as the "cadillac" option
- My team is almost entirely inbound so we have more power than a typical outbound deal
- We are selling to a lot of small businesses and entrepreneurs who aren't always the most sophisticated/experienced buyers
- Fairly short/borderline transactional sales cycle. Most of my deals that close do so within 1 month
- Of course the main defense here, we do this to drive urgency otherwise prospects will sit on the fence for weeks or go dark after they lose the juice that led them to call us in the first place
- Helps identify risk in a deal. I find that if a propsect doesn't move forward within a deadline we offer, they weren't that serious/weren't going to buy anyway
A few cons I do recoginze
- We are likely leaving some money on the table every month with people that would have closed without a discount
- Can break rapport with more sophisticated buyers who see through this or have heard it before. I don't feel this happens often tbh
- Tends to be used as a crutch
There are two ways we will usually go about it.
- Come at them with price, then after assessing feedback/process/timeline, tell them we have a "promotion" approved through X time frame or Y discount. OR
- When they start trying to negotiate or tell us the price is too high, tell them we can go get a custom discount approved, but it will only be approved through X time frame.
Yes, we do try to loop back to the original value prop if a price objection comes up, but again discounting does tend to be used as a crutch I think.
What I try to do is not throw discounts at the wall and see what sticks for people who aren't qualifed, but I'm willing to move to get someone qualified but on the fence to a yes.
What do you guys think, is my situation common? What is wrong with it if anything? I think what we do is okay, but I'm open to being convinced as to it's problems.
8 comments