Offering a discount is the crutch of a bad salesperson. I have said that for years and I stand by it. I am also guilty of offering mates rates to win a new customer, so I say it with some hard-earned experience on both sides of the argument.

The temptation is completely understandable. A deal is close, the buyer is hesitating, and a reduction in price feels like the logical lever to pull. It is fast, it is simple, and it produces an immediate result. The problem is what it produces after that.

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What You Are Actually Buying With a Discount

When you discount to win a customer you are not just reducing your margin on that deal. You are setting a price expectation for every conversation that follows. You are signalling to the buyer what you are actually worth when the pressure is on. And you are, in most cases, selecting for exactly the kind of customer you least want.

Trace back the negotiation history of your most difficult customers. The ones who constantly push for more, who question every invoice, who treat your team with a sense of entitlement that makes the account genuinely unpleasant to service. I would bet a crisp fifty dollar bill that a discount was involved somewhere early in that relationship. The discount did not just win the customer. It defined the low value relationship from the first interaction.

Discount-acquired customers tend not to value your brand. They value the price they paid. The moment a competitor offers a lower one, the loyalty that never really existed evaporates entirely. You have not built a customer. You have rented one, at below-market rates, and absorbed the cost of servicing them in the meantime.

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Hold the Brand High

One of the best pieces of commercial advice I received from a sales manager was about competitors who win on price. He said he was never worried about them, because the moment the market tightens they have no margin left and they go out of business.

If you hold your price and your brand positioning high through the good times, you are building something that has real value when conditions change. A business with strong brand perception and healthy margins has options in a downturn. It can choose to reduce price strategically to take market share, absorb the hit for a defined period, and emerge from the other side with a larger customer base and a competitor landscape that has been thinned out by the businesses that were living on razor margins before the pressure arrived.

That is not luck. It is the commercial payoff of years of discipline around price and brand. The businesses that panic and discount in tough conditions, having never built the brand equity to justify a premium, have nothing left to offer. The businesses that held the line have a lever they have never pulled before and a market that is suddenly more receptive to pulling it.

Build a premium logo. Let the race to the bottom be someone else’s strategy.

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Discounting and Marketing Are Not the Same Thing

There is a version of discounting that works and it is not really sales. It is marketing. The fifty percent off end-of-season sale, the clearance event, the introductory offer for a new product launch. These mechanics can be genuinely effective at customer acquisition when they are part of a deliberate strategy with a clear beginning and end.

But even here, it is worth being honest about who you are acquiring. Deep discount promotions tend to attract buyers who are primarily motivated by the discount. A meaningful portion of those customers will not return at full price, will not become advocates for your brand, and will not build into the loyal customer base that sustains a business over time. They are fair-weather customers, attracted by the conditions of a specific moment rather than by genuine alignment with what you offer.

The customers worth having, the ones who refer, retain, and grow their spend over time, almost never arrive through a discount. They arrive because they understood the value before the price came up.

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When a Discount Is the Only Path Forward

I said at the outset that I am guilty of this too. So let me be honest about when it makes sense.

If a deal is genuinely at the point where a price reduction is the only remaining barrier and the customer is otherwise a strong fit, a discount can be justified. The test I apply is whether the customer, at full price, would be worth having long term. If the answer is yes, and the relationship has been built on value rather than price, a one-time concession to get them over the line is a commercial decision, not a capitulation.

The distinction matters. A discount offered from a position of strength, late in a well-run sales process, to a customer who already understands and values what they are buying, is very different from a discount offered early in the conversation to a buyer who is primarily motivated by price. The first is a calculated move. The second is a signal of desperation that the buyer will remember and exploit for as long as the relationship lasts.

As a blanket rule, never discount unless there is genuinely no other path to the deal. And even then, it is often better to walk away from a single deal than to lower your brand value for the lifetime of the customer relationship that follows.

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What to Do Instead

The alternative to discounting is not stubbornness. It is value articulation and discovery.

If a buyer is pushing back on price, the right question is not how low can I go. It is what is the value they are not yet seeing. In most cases, price resistance is a symptom of incomplete understanding, either of the problem being solved, the cost of not solving it, or the difference between what you offer and what a cheaper alternative actually delivers.

A salesperson who can reframe the conversation around value, who can articulate clearly what the customer gains and what they risk by choosing a cheaper option, rarely needs to discount. The buyer who genuinely understands the full picture is almost never making a decision purely on price. They are making a decision on confidence, and that is a conversation a skilled salesperson can have without reducing their margin.

This is one of the reasons sales process and sales enablement matter so much in practice. A rep who reaches the end of a conversation and has no response to price objection other than a lower number has either not done the discovery work or has not been equipped with the tools to handle it. Both are fixable with the right sales infrastructure and coaching.

If your team is discounting regularly to close deals it is worth asking whether the problem is price or whether it is preparation. In most cases it is preparation. And that is a much cheaper problem to solve than the cumulative cost of the margin you are giving away.

You can read more about how we think about sales process, sales strategy, and building outsourced sales teams that hold price and close on value at www.outsold.com.au/blogs.