Never cut the price, change the scope.

The wording

It’s simple, and it needs practising, because it feels uncomfortable the first few times.

“Either we reduce the scope so it fits the budget, or you raise the budget. The hourly price and the time we’ve allowed for stay as they are.”

Two ways forward, both of them viable, and both of them the customer’s to choose. That’s why the sentence works: it doesn’t say no, it moves the decision.

Why the discount costs more than it looks

A reduced quote promises the same thing for less money. Nobody has taken any work away, so the work stays and gets done in less time.

Quality then becomes the budget regulator. The delivery teams get the stress, the customer gets an experience that falls short of what they expected even though they paid less, and nobody is happy with anything.

On top of that, next time the same customer negotiates from the new price. So the discount wasn’t a one-off, it was a new price list.

This is about your people too

This is the part that rarely gets said out loud, and it matters at least as much as the margin.

A price is a valuation of the work. When you lower it without removing anything, you’re telling the people who have to do the job that what they do is worth less than you claimed a moment ago. Nobody puts it that way, but everybody hears it.

And they know what’s coming. Same delivery, less time, same expectation. If it happens again and again, the organisation learns that quality is always the one that has to give way, and then people stop making an effort for it. It’s hard to build pride in a company where the work is regularly sold below what it’s worth.

Saying instead that the scope is coming down is standing up for both the price and the person who has to deliver. That gets noticed internally, and over time it gets noticed on the outside.

There has to be cover for it

One objection deserves to be taken seriously: this only works if you actually deliver accordingly.

A higher price raises expectation, and expectation is the denominator in Total quality. If you charge more than the customer is used to, perceived quality has to rise at least as fast, otherwise the ratio drops below one and you’ve created an unhappy customer who paid extra for the privilege.

So this isn’t a pricing strategy that stands on its own. It assumes you know why you’re worth more and that you can show it in the delivery. If you can’t, the price isn’t the problem.

It’s also worth knowing where you stand in relation to the market. Put price against perceived quality in a grid and a few positions appear that everyone recognises. High price and high quality is the premium position, and it works as long as the customer can see the difference. Low price and low quality is honest and works too, in its niche. The trouble sits in the other squares, above all high price and mediocre delivery, which is exactly what a discount with no work removed turns you into over time.

The market decides how easy it is

The principle always holds, but the resistance varies, and it’s honest to say so.

A seller’s market or a neutral one. Here the wording works almost every time. The customer has few alternatives, or values the right supplier above the lowest price, and the conversation quickly turns to what should be included rather than what it’s allowed to cost.

A buyer’s market with plenty of cheaper alternatives. This is harder, and anyone who claims otherwise hasn’t stood in it. The customer can go elsewhere, and sometimes they do.

Even then, though, the discount is rarely the answer, for a simple reason: it wins a deal and loses the price position. What works better in a tough spot is to get precise about what you’re best at, which means shrinking the offer down to the part where you’re hard to compare, and letting the rest go. It’s the same move as in this text, only at company level instead of in a quote.

Sometimes the scope should come down anyway

There’s one case where less scope is right even when the budget does stretch.

Inexperienced buyers almost always order too much. You think you know what you want, and once it’s delivered it turns out several parts never get used. The money is spent, the things exist, and nobody uses them.

For that customer you’re doing a favour by proposing a smaller first step. Deliver the part that has an effect soonest, let them see how it works in their everyday life, and let them order the rest once they know what they actually need. You get a happier customer, a more honest relationship and, nearly always, a continuation.

It takes some nerve to sell less than you could have sold, which is a different kind of price discipline from the one in this text, but it comes out of the same thought.

What the principle gave

In one of our assignments this move was one of the things that pushed the average price up by thirty per cent, while customer satisfaction rose to a cNPS of 90.

So the customers got happier from paying more, which says something about what they were really buying.

Something to try

Write the sentence down and read it out loud. Take the wording at the top and adapt it to how you speak. Read it out loud until it sounds natural. It has to sit in your bones before you need it, because in the moment there’s no time to compose yourself.

Go through last quarter’s discounts. What did you give away, and what was taken out of the delivery in return? If the answer to the second question is usually nothing, you know where the money goes.

Decide the mandates. What can a salesperson approve alone when it comes to price and discount, what sits with the manager, and what has to go up to the CEO? Without that line, this principle is just an opinion.

Ask an inexperienced customer what they actually used. Take a delivery from last year and go through what got used. The answer makes you a better adviser next time, and it usually leads straight to new business.

In practice

The most common reason the principle doesn’t hold isn’t that somebody disagrees with it. It’s that it has to be applied at four o’clock on a Friday by a salesperson with a budget to hit, no clear limit on their mandate and no template backing them up.

That’s why this text belongs together with Make it easy to do the right thing. Write the discount limits into the quote template, decide the mandates in advance, and put the sentence in the sales material. Then nobody has to be brave on their own at four o’clock on a Friday.