Why We Don't Offer Discounts At Chili Piper. Ever

Tom Rowe
August 31, 2022
min to read

At Chili Piper, we have a longstanding policy of never discounting our products. Everyone pays the same price. Learn six reasons why we never offer discounts — and why you shouldn't either.

Why We Don't Offer Discounts At Chili Piper. Ever

Tom Rowe
August 31, 2022
min to read

At Chili Piper, we have a longstanding policy of never discounting our products. Everyone pays the same price. Learn six reasons why we never offer discounts — and why you shouldn't either.

Famous in some circles and infamous in others, Chili Piper has a longstanding policy of never discounting our products. 

Like, ever. 

It’s a north star of ours. An unwavering guiding principle that’s served us well as we’ve driven triple-digit growth for multiple years running. 

If you’re a customer of ours or have been through a demo with someone from our team, you likely already knew our stance on discounting. Everyone pays the same price, whether you have two licenses or 2,000 licenses. Whether we share investors, if you used to work here, or if we buy your product too — it’s the same price for everyone. 

Don’t believe us? Ask one of our thousands of customers

What’s the thought process behind our “no discounts” stance?

From a CFO’s perspective, the policy makes sense. Why take 75¢ on the dollar? Why introduce variability in financial modeling? And why open your organization up to contraction at renewal when your customers tell you they need to cut costs? 

On the other hand, the idea might not be so popular with sales leaders. The doubters (read: haters) have plenty of skepticism. They’ll say:

  • “Negotiation is an expected part of the software buying process.”
  • “We use discounts to drive urgency.”
  • “Larger companies expect to pay less per seat and we need the freedom to win these deals by whatever means necessary.”
  • “We’ll take on too much churn if we can’t negotiate at renewal.”
  • “Our competitors are discounting, we need to as well.”

So, let us (the sales leaders of Chili Piper) take this opportunity to tell you six reasons why we’d adopt the same non-negotiable, no discounting policy if we started our own companies today. 

1. Faster sales cycles

Imagine removing price negotiation from the back half of your sales cycle. On average, how many touch points with how many stakeholders do you have when a prospect (or customer) is working to shave off a portion of their price? 

Time kills deals, and you can eliminate that time and the dynamics of winning or losing a negotiation by removing the variability of your pricing.

2. Leverage the dark funnel

It’s increasingly common that by the time your reps talk to an inbound lead, the prospect has already done extensive research on your product, capabilities, and pricing (a concept we refer to as the dark funnel). 

When your pricing is rigid and transparent (we include our pricing on our G2 profile and our website), customers can include price analysis in their research — effectively removing price and negotiation from your sales process so your team can focus on value. Keeping your price hidden behind the lock and key of discovery and demo (an experience, I might add, that is horrendous for buyers) is losing you more deals than you think.

As sales leaders, we all want more leads that are more qualified, more informed, and more ready to buy today. Make the buying process easier by making your price transparent. 

3. The end of the month will still feel (and perform) like the end of the month

As sales leaders, we’ve all been on both sides of the end-of-month tango. “We can shave off ten percent if you sign by end of month” or “we’ll waive the platform fee assuming you sign this quarter.” 

The truth is, these concessions aren’t driving your close dates — your reps are. If those opportunities were open and your prospects were engaged, they were likely going to be buyers at full price, and you’ve made the short-sighted decision to trade $1.00 tomorrow for $.90 today.

Take Chili Piper as evidence. We obviously don’t discount. Nevertheless, the last week of the month is consistently our strongest week (actual SFDC report below). We’re not pulling any commercial levers. We simply drive the buying process towards these dates and lean into time to value (TTV) to ensure our prospects know the best time to act is now.

4. Discounts are not a one-time concession

In a SaaS environment, you’ll relive your discounting choices every year at renewal. If you give a prospect a 10% discount today, you’ll have 10% less ARR renewable a year from today. 

Worse yet, you’ll create a customer base that is primed and ready to negotiate annually, so even flat renewals can be an uphill battle. In short, when you give a $10,000 customer a 10% discount to sign this month, your company isn’t only losing $1,000. Your company is losing $1,000 annually from a customer you hope to retain for years to come. The ultimate consequence of that concession might be $5,000 or more.

At a company where discounts don’t exist, renewals become easier, and you’ll invest less of your account managers’ time in negotiating prices or other terms at the point of renewal. 

5. Keep the books clean, and give yourself the freedom to strategize

In the six years since our inception, Chili Piper has made one significant pricing change. This would have been a daunting challenge at most companies, likely resulting in thousands of negotiation calls. At Chili Piper, we could model our business impact with simple arithmetic and notify our customers (in advance, of course) with emails and in-app notifications.

Due to our commercial rigidity, we had the luxury of modeling price increase per customer, anticipated churn rates, and ultimately, the ARR impact of our pricing decision using exact numbers. We also notified our customer base ahead of time of the price change, giving them a one-time opportunity to lock in multi-year deals knowing that if they missed this opportunity, we wouldn’t be negotiating at renewal.

At most other companies, that modeling would have been full of estimates and loaded with wishful thinking. The CFO would have written a check that Sales couldn’t cash because they’d be staring down the barrel of four quarters’ worth of customer negotiations.

6. Discounts don’t stay a secret

All of the principles we’ve mentioned work if – and only if – you can look every customer in the eye and tell them your organization simply does not discount. Without that claim being 100% true, you put your sales team and in turn your organization in a compromised position.

The universe of SaaS sales is small, and employees are more portable now than at any point we’ve seen before. Break your discounting rules for one customer today, and you’ll find that same buyer a year later prospecting another organization (or worse, a different active customer). Sign as many NDAs as you’d like, the truth will get out. And don’t even get us started on the quid pro quo game of SaaS exchanges that so often gets played…

In a world of discounts, negotiations are a win-loss proposition for sellers and prospects alike. The experience is slow and contentious, and a promising business relationship inevitably starts with a sour taste. Removing discounting from the equation allows your team to do what they’re trained to do — focus on value, focus on consultative selling, and focus on selling the right solution for your customer’s unique needs. 

The name of the game is to make buying easier for prospects. Fewer hoops to jump through, less time spent in a sales process, and less negotiation. It’s not only the reason we’ve built our sales process as we have, it’s the reason our products exist. 

Check out Chili Piper today to make life easier for the people you sell to and fix your leaky funnel for good.

Famous in some circles and infamous in others, Chili Piper has a longstanding policy of never discounting our products. 

Like, ever. 

It’s a north star of ours. An unwavering guiding principle that’s served us well as we’ve driven triple-digit growth for multiple years running. 

If you’re a customer of ours or have been through a demo with someone from our team, you likely already knew our stance on discounting. Everyone pays the same price, whether you have two licenses or 2,000 licenses. Whether we share investors, if you used to work here, or if we buy your product too — it’s the same price for everyone. 

Don’t believe us? Ask one of our thousands of customers

What’s the thought process behind our “no discounts” stance?

From a CFO’s perspective, the policy makes sense. Why take 75¢ on the dollar? Why introduce variability in financial modeling? And why open your organization up to contraction at renewal when your customers tell you they need to cut costs? 

On the other hand, the idea might not be so popular with sales leaders. The doubters (read: haters) have plenty of skepticism. They’ll say:

  • “Negotiation is an expected part of the software buying process.”
  • “We use discounts to drive urgency.”
  • “Larger companies expect to pay less per seat and we need the freedom to win these deals by whatever means necessary.”
  • “We’ll take on too much churn if we can’t negotiate at renewal.”
  • “Our competitors are discounting, we need to as well.”

So, let us (the sales leaders of Chili Piper) take this opportunity to tell you six reasons why we’d adopt the same non-negotiable, no discounting policy if we started our own companies today. 

1. Faster sales cycles

Imagine removing price negotiation from the back half of your sales cycle. On average, how many touch points with how many stakeholders do you have when a prospect (or customer) is working to shave off a portion of their price? 

Time kills deals, and you can eliminate that time and the dynamics of winning or losing a negotiation by removing the variability of your pricing.

2. Leverage the dark funnel

It’s increasingly common that by the time your reps talk to an inbound lead, the prospect has already done extensive research on your product, capabilities, and pricing (a concept we refer to as the dark funnel). 

When your pricing is rigid and transparent (we include our pricing on our G2 profile and our website), customers can include price analysis in their research — effectively removing price and negotiation from your sales process so your team can focus on value. Keeping your price hidden behind the lock and key of discovery and demo (an experience, I might add, that is horrendous for buyers) is losing you more deals than you think.

As sales leaders, we all want more leads that are more qualified, more informed, and more ready to buy today. Make the buying process easier by making your price transparent. 

3. The end of the month will still feel (and perform) like the end of the month

As sales leaders, we’ve all been on both sides of the end-of-month tango. “We can shave off ten percent if you sign by end of month” or “we’ll waive the platform fee assuming you sign this quarter.” 

The truth is, these concessions aren’t driving your close dates — your reps are. If those opportunities were open and your prospects were engaged, they were likely going to be buyers at full price, and you’ve made the short-sighted decision to trade $1.00 tomorrow for $.90 today.

Take Chili Piper as evidence. We obviously don’t discount. Nevertheless, the last week of the month is consistently our strongest week (actual SFDC report below). We’re not pulling any commercial levers. We simply drive the buying process towards these dates and lean into time to value (TTV) to ensure our prospects know the best time to act is now.

4. Discounts are not a one-time concession

In a SaaS environment, you’ll relive your discounting choices every year at renewal. If you give a prospect a 10% discount today, you’ll have 10% less ARR renewable a year from today. 

Worse yet, you’ll create a customer base that is primed and ready to negotiate annually, so even flat renewals can be an uphill battle. In short, when you give a $10,000 customer a 10% discount to sign this month, your company isn’t only losing $1,000. Your company is losing $1,000 annually from a customer you hope to retain for years to come. The ultimate consequence of that concession might be $5,000 or more.

At a company where discounts don’t exist, renewals become easier, and you’ll invest less of your account managers’ time in negotiating prices or other terms at the point of renewal. 

5. Keep the books clean, and give yourself the freedom to strategize

In the six years since our inception, Chili Piper has made one significant pricing change. This would have been a daunting challenge at most companies, likely resulting in thousands of negotiation calls. At Chili Piper, we could model our business impact with simple arithmetic and notify our customers (in advance, of course) with emails and in-app notifications.

Due to our commercial rigidity, we had the luxury of modeling price increase per customer, anticipated churn rates, and ultimately, the ARR impact of our pricing decision using exact numbers. We also notified our customer base ahead of time of the price change, giving them a one-time opportunity to lock in multi-year deals knowing that if they missed this opportunity, we wouldn’t be negotiating at renewal.

At most other companies, that modeling would have been full of estimates and loaded with wishful thinking. The CFO would have written a check that Sales couldn’t cash because they’d be staring down the barrel of four quarters’ worth of customer negotiations.

6. Discounts don’t stay a secret

All of the principles we’ve mentioned work if – and only if – you can look every customer in the eye and tell them your organization simply does not discount. Without that claim being 100% true, you put your sales team and in turn your organization in a compromised position.

The universe of SaaS sales is small, and employees are more portable now than at any point we’ve seen before. Break your discounting rules for one customer today, and you’ll find that same buyer a year later prospecting another organization (or worse, a different active customer). Sign as many NDAs as you’d like, the truth will get out. And don’t even get us started on the quid pro quo game of SaaS exchanges that so often gets played…

In a world of discounts, negotiations are a win-loss proposition for sellers and prospects alike. The experience is slow and contentious, and a promising business relationship inevitably starts with a sour taste. Removing discounting from the equation allows your team to do what they’re trained to do — focus on value, focus on consultative selling, and focus on selling the right solution for your customer’s unique needs. 

The name of the game is to make buying easier for prospects. Fewer hoops to jump through, less time spent in a sales process, and less negotiation. It’s not only the reason we’ve built our sales process as we have, it’s the reason our products exist. 

Check out Chili Piper today to make life easier for the people you sell to and fix your leaky funnel for good.

Tom Rowe

Tom Rowe is the SVP of Sales at Chili Piper. He’s spent over a decade in sales leadership across numerous industries and is passionate about sales strategy and methodologies. Outside of work, you’ll typically find Tom with his family or on the golf course. 

Contributing to this article were the leaders of Chili Piper’s AE team - Amanda Bagley, Alex Franco, and Lauren Riley.

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