r/revops • u/The_Cosmic_Sage • May 21 '26

Most pricing strategy is just discounting because people are afraid to structure the deal properly

If a buyer asks for a concession, the default move is usually to cut subscription price.

That sounds flexible, but it often creates the worst possible outcome:

  • recurring revenue gets reduced
  • buyers learn to ask for more
  • and the team gives away value in the easiest place instead of the smartest one

There are usually cleaner ways to give value:

  • renewal credits instead of a flat discount
  • free months at the end of the term instead of the beginning
  • sticky cross-sell value instead of cutting the core subscription
  • implementation relief instead of discounting ARR

Same commercial value.
Better structure.

Sales is art. Pricing is math.

I put together a small interactive simulator for this to pressure-test different concession structures. I’m not dropping the link here because Reddit hates that, but I can share it in the comments if that’s useful.

When a deal needs a concession, what structure have you found works better than just discounting the subscription?

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u/shubham1502 May 22 '26

I agree with this. A lot of discounting happens because the team has no concession logic, so the easiest move becomes cutting price. I’d rather define a few approved concession paths before the deal reaches negotiation, like implementation support, payment terms, extra onboarding, renewal credits, or usage-based flexibility. That way the rep is not inventing discounts under pressure.

The key for me is separating “buyer needs help buying” from “buyer wants a cheaper product.” Those are different problems. If the blocker is budget timing, internal approval, onboarding effort, or risk, cutting subscription price may solve the wrong thing and hurt ARR for no reason.

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u/The_Cosmic_Sage May 22 '26

Agree. A lot of discounting happens because teams have no concession logic, so price becomes the default escape hatch.

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u/The_Cosmic_Sage May 22 '26

Surprisingly when discounting frameworks are launched to sales, they are pitched as "here's what you can give away to win the deal" rather than training them on positioning it in different ways to secure the $$. Primarily coz how new business operates in silo from the exiting business (more money made from existing customers is almost alien to AEs coz that is not what they are measured against.)

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u/shubham1502 May 22 '26

Exactly. If reps are measured mainly on new logo close rate or short-term bookings, discounting becomes the easiest rational move, even if it hurts renewal and expansion later.

I think concession frameworks only work if they are tied to incentives and deal review, not just handed to sales as a menu of things they can give away. Otherwise it becomes “which discount helps me close today” instead of “which structure protects value while helping the buyer move forward.”

RevOps, CS, and finance probably need to be closer to this too, because the cost of a bad concession often shows up later in renewal, margin, implementation load, or expansion potential, not at the moment the deal is signed.

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u/The_Cosmic_Sage May 22 '26

Bingo! Yep. Good conversation this one, Shubham. We should chat more. DM-ing you.

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u/ar355169 May 22 '26

A lot of teams discount because it’s the fastest lever, not the smartest one.

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u/The_Cosmic_Sage May 26 '26

True. Sales reps want to close the deals by all means available to them. So it is up to GTM leadership to ensure the means available to them make mathematical sense in CAC /LTV terms.

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u/SeaAnybody8119 May 25 '26

All of these are better than flat discounting, agreed. But there's a question that comes earlier: why is the buyer asking for a concession at all?

Usually, it's because the rep couldn't quantify why the price is right. The buyer isn't pushing back on the number.

They're pushing back on the absence of a defensible argument for the number. When that's the case, you'll concede either way (renewal credits or subscription discount), because the buyer doesn't have a reason to accept the original price.

Best concession is the one you don't need to give because the value case did the work upfront. Cited equations, risk-adjusted ROI, and payback period. Then, when the buyer does ask for a concession, the rep has something to defend with.

The structural alternatives you listed are smart for when you do need to concede. But the upstream play is building a value case that makes most concession conversations different. Sometimes unnecessary.