July 14, 2026
Hi Everyone,
Discounting works, and that's what makes it hard to stop.
A price cut is often the fastest way to close a deal that's stuck. But it's also the most expensive way to close them.
Customers acquired with a discount will churn at more than twice the rate of those who pay full price. And they expect the same lower price when the renewal comes around.
There are three ways to respond when your pricing is under pressure. Today we're walking through when to use each one.
When to hold
Hold your list price when only one deal is under pressure.
If your win rate is steady and one large customer is pushing for a discount, that's a negotiation on one deal. If you lower the price, ask for something in return – a longer contract, a case study, or a reference call.
But keep the list price where it is. Once you drop it, every new deal starts from the lower number.
Hold also when you're losing deals in one part of your market but not others. If mid-market deals are getting harder but enterprise is fine, the problem might be with your positioning, and cutting your price won’t fix that.
When to restructure
Restructuring means changing how you charge, not how much. You can move from seats to usage, unbundle a heavy plan into smaller ones, or change the unit you sell by.
It's the right move when the pressure is showing up across your pipeline. Deals are closing more slowly, discounts are getting deeper each quarter, or procurement teams are pushing back on the pricing model itself.
In 2023, Intercom launched an AI support agent called Fin. Instead of charging per seat, they charge $0.99 every time Fin resolves a customer conversation on its own. Customers only pay when the tool works.
When to cut
Cut only when the market has genuinely reset and your list price is now out of line with what customers can pay.
This doesn't happen often. Look for these signs:
- Your main competitors have dropped their prices
- Your best reps are telling you the price itself is why deals are lost, not anything about the product
- Buyers who would have said yes a year ago are walking away over the number alone
If you cut, start small. Apply it to one type of customer, not everyone, set a date to review it, and decide now what you'd need to see to raise the price back.
Before you decide
Each of these responses has a way it usually goes wrong:
Holding your price only works if your reps can defend it when a customer pushes back. Give them two or three clear reasons the price is fair, before the next sales call.
Repricing can upset the customers you already have. Keep them on the old model for at least a year, and try the new pricing with new customers first.
Most price cuts end up being permanent, so write down what would have to change to increase again, before the cut goes live.
Go deeper
👉 Paddle: Discount Pricing Strategy: Definition, Example & Application — the data behind today's churn numbers, plus three ways to win a price-sensitive buyer without discounting, including an entry-level tier that captures them at full value.
👉 Stripe: How Intercom launched outcome-based pricing for Fin — the story of how Intercom designed the $0.99 per resolution model, and what changed for their business in the first year
👉 HubSpot: Announcing upcoming changes to our pricing — HubSpot moved to seat-based pricing in 2024, dropped the minimum team size, and let customers start with just the users who needed access. Useful if you're thinking about your own restructure.
Coming up tomorrow
Tomorrow, we’re looking at skip-levels, the meetings where you talk to people below your direct reports to hear what’s happening in the business day to day and where work is getting stuck.
That's it for today!