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Multi-year Discount Tiering

When you are doing multi-year discounts, what % do you find is a good amount to tier it up without cutting too much into your deal size, but still being a good value perception for buyer? 5% seems standard, but can you get away with like 3%?


For example, let's say a 1 year contract has a 20% discount, what would be your step up for a 2 and/or 3 year?

Discount tiers?
Attached poll
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๐Ÿ“ˆ Closing
โ˜๏ธ Software Tech
3
BigMeech
WR Officer
+11
Coors Light Advocate
I don't give multi-year discounts anymore, I tell them it is the standard length early so they don't ask for it. I actually decrease the discount if they try to shorten the term.ย 

I think it may depend on the industry.ย 
88mph
Catalyst
+5
Enterprise Account Executive
Great strategy! Many deals I work are at renewal where they are already on a 12 month term with existing discounts in place, so makes it a bit different in that regard.
poweredbycaffeine
Politicker
+7
Bean Juice Drinker | Sales Savant
Decreasing discounts over multi-years. Highest in year one, with a goal of getting closer to list over years 2 and 3.
SA
SADNES5
Politicker
+6
Business Development
Industry I am in, is capital intensive for the first 6 months in a net new deal.ย 

Usually give them some training wheels. Then dial it back by 10% for each of their business cycles until 100 is hit. So 20% yr 1. 10% yr 2. Full rate year 3+.ย 

Usually 5-20 year deals.ย 
11
Offering concessions at quarter close
Discussion
24
12
Should the total value of multi-year SaaS deals count towards your current year quota?
Question
16
How do clients pay for a multi-year deal?
+40
OldDogNewTricks , ย  harebrained , ย  LukeF ย  and 40 people voted
3
Currently have a contract out for signing on the last day of the FY
Question
3
How many deals you trying to close before EOFY?
+59
BCD , ย  NoSuperhero , ย  BallerOfTheYear ย  and 59 people voted
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