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Procurement has entered the conversation and wants thirty percent off. How do I negotiate without gutting the deal?

Understand what is happening: procurement is usually measured on the savings they extract, so they are going to ask for something no matter how fair your price is. That means you should have built room in before the conversation started, not tried to hold a line you never had. The rule that keeps you sane is never give a concession without taking one. Discount for annual prepay, for a multi year term, for a logo and a case study, for a reference call, for a shorter payment cycle. Never for asking. Put a deadline on every number you quote so a concession does not become the new list price. And know your walk away point before you get on the call, because a deal that only closes at fifty percent off is a deal that will renew at fifty percent off forever.

Go deeper

4 resources, 1 India-specific, 4 link-checked.

📄 Article
✓ Link checked Free Intermediate

The pragmatic case for pricing so discounts are survivable instead of pretending you will hold the line: mark up by around 20 percent, automate the small predictable discounts, and model the procurement discount into big deals before they arrive.

The Confounding Logic of Discounting

From SaaStr by Jason Lemkin short read

  • Many enterprise buyers expect 10 to 20 percent off, then another cut once procurement gets involved.
  • On deals above 50K ACV, buyers wait for month or quarter end about 7 or 8 times out of 10.
  • Price enterprise 20 percent above the yield you actually model, then discount back to target (the Salesforce move).
  • Procurement staff are often bonused on getting at least X percent off the PO they receive.
Open saastr.com
📄 Article
✓ Link checked Free Beginner

Puts real numbers on what you should trade a discount for: roughly 15 to 20 percent for an annual commit from a smaller buyer, and multiple rounds of give budgeted into enterprise pricing from the start.

Dear SaaStr: What's a Reasonable Discount for an Annual Contract? How About a 3 Year Contract?

From SaaStr by Jason Lemkin 6 min read

  • Raise monthly pricing about 25 percent so you can price in a 20 percent discount for going annual.
  • For SMBs a 15 to 20 percent annual discount is the understood incentive, though most small SMBs still will not take it.
  • Steep multi year prepay discounts (40 percent off year 3) trade tomorrow's ARR for today's cash, only worth it if churn is high.
  • Pay reps full commission up front on years 2 and 3 of prepaid deals if you want them closed.
Open saastr.com
🎧 Podcast
✓ Link checked India Free Intermediate

Kapil built one of India's few listed SaaS companies, so when he takes apart the myths (Indians will not pay for software, they demand endless customisation, they want enterprise support at SMB prices) he is arguing from a P&L. Essential if you are deciding whether India is a real market for you.

7 Myths About Selling B2B SaaS In India ft Unicommerce Founder Kapil Makhija

On The Neon Show by Siddhartha Ahluwalia with Kapil Makhija 80 min listen

Watch on YouTube neon.fund

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