IAMAM profile picture
IAMAM profile picture

IAMAM

SADNESS

Catalyst
Valued Contributor
Opinionated
+6

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?

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CoorsKing
WR Officer
3
Retired King of the Coors Knights
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. 

I think it may depend on the industry. 
IAMAM
Catalyst
0
SADNESS
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
WR Lieutenant
1
☕️
Decreasing discounts over multi-years. Highest in year one, with a goal of getting closer to list over years 2 and 3.
SADNES5
Politicker
0
down voters are marketing spies
Industry I am in, is capital intensive for the first 6 months in a net new deal. 

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+. 

Usually 5-20 year deals. 

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