Discounting as a habit

A discount feels like it costs you the discount. It does not; it costs you the discount out of your margin, which is a much smaller number. On work priced at 1,000 with 300 of margin, a ten percent discount hands over 100 — a third of everything you were going to make. To earn that back you have to sell half as much work again at full price.

The habit compounds in ways beyond the arithmetic. Buyers talk to each other, so a discount given once becomes the price. A buyer who got ten percent by asking will ask again, and will have learned that your first number is not serious. And discounting is contagious inside a business: once one person is authorised to give it away to close a deal, everyone does.

What to do instead when someone asks. Hold the price and change the scope, so the price falls because the thing got smaller. Or trade the discount for something you actually want — payment up front, a longer commitment, a reference you can use, an introduction that becomes a customer. Or simply say the price is the price, in a calm sentence, and be prepared to lose the deal. Losing a deal you cannot afford is not a failure; taking it is.