# Discounts and give–get trades > How much extra volume a discount needs to pay for itself, why longer payment terms are a hidden discount, what to ask for in return, and who approves what. - Course: [B2B Marketing and Sales: Win Your First Company Customers](https://productovi.com/courses/b2b-marketing-and-sales.md) - Module: Proposal and price - Lesson 23/32, ~24 min - Source: https://productovi.com/courses/b2b-marketing-and-sales/discounts-and-give-get ## «Just 10%» **Marta:** Cobalt's learning lead replied to our proposal. She likes it, but their current school gives them 10% off, and she wants the same before she can switch. **Sofia:** 10% of 800 is only 80 UAH. We'd still be at 720, well above our costs. Let's say yes and get the deal. **Alex Tutor:** Compare the 80 with what we keep, not with the price. Each lesson costs us 430 for the tutor and 31 for video and AI, so we keep 339. A discount comes straight out of those 339. **Alex Tutor:** After 80 off we keep 259 a lesson. To earn what we earned before, we need 339 ÷ 259 = 1.3089 times the lessons. That's the **discount break-even volume**: 30.89% more lessons, just to stand still. $$ \Delta V = \frac{d}{m - d} = \frac{80}{339 - 80} = 30.89\% $$ *d: the discount per lesson, m: the contribution per lesson before the discount, ΔV: the extra volume needed to keep the same contribution.* > **Exercise:** Klasna keeps 339 UAH on an 800 UAH lesson. How many more lessons does a **5%** discount (40 UAH) need to keep the same contribution? ## The discount nobody calls a discount **Marta:** She also asks for 60 days to pay instead of our 30. That one's free, right? Same price, just later. **Hanna:** Not free. Money we wait for is money we borrow or don't have. Our credit line costs 24% a year, so treat that as what our money costs. **Alex Tutor:** Put a number on Hanna's point for one lesson. > **Exercise:** Cobalt wants **60** days to pay instead of **30**. Klasna's money costs **24%** a year. What do the extra 30 days cost Klasna on one **800 UAH** lesson, in UAH? **Alex Tutor:** Thirty extra days on one lesson: 800 × 0.24 × 30 ÷ 365 = 15.78 UAH, about 2% of the price. A longer payment term is a hidden discount, it just doesn't appear on the invoice. **Alex Tutor:** The lesson «Receivables and payment terms» in the course «Finance for Product People» goes deeper: what terms do to cash, and how to price them. Here, just count them as part of the discount. > **Exercise:** Which requests are hidden discounts, even though the price per lesson stays at 800 UAH? Select all that apply. ## Trade, don't give **Sofia:** So we refuse? She'll stay with her current school. **Alex Tutor:** Not refuse: trade. A **give–get trade** means every concession comes with something back that's worth at least as much to us. «We can do that if you can do this.» **Marta:** What can a buyer give us? More lessons, enough to cover the discount. A longer contract. Payment in advance. A reference we can name to the next prospect. **Alex Tutor:** So which reply to Cobalt is a real trade? > **Exercise:** Cobalt asks for 10% off, "like our current school". Which reply is a give–get trade? **Sofia:** Could I add «this price is only valid until Friday» to speed her up? **Alex Tutor:** Only if it's true. An invented deadline is pressure, and procurement spots it. A real trade gives her a reason to say yes that she can explain to her own boss. > **Exercise:** Match each thing a buyer might give with why it can be worth a concession to Klasna. ## Who can say yes **Marta:** Our rules: you don't discount on your own. I approve 3% for a six-month commitment, 5% for a full year plus a reference. 10% needs Leo and Hanna, a year and prepayment. 20% we don't offer. **Alex Tutor:** That's an approval matrix, sometimes run by a **deal desk**: bigger concessions need more senior eyes and a bigger give. It protects you too: «I can't approve that alone» is true, not a trick. **Alex Tutor:** Is that line a trick? True or false. > **Exercise:** **True or false:** when Klasna's rules really require Leo and Hanna to approve a 10% discount, saying "I can't approve that alone" is an honest answer, not a bluff. **Sofia:** Then why not say «my boss won't allow it» even when she would? **Alex Tutor:** Because an invented boss is a bluff, and bluffs get called. Say what the rule is and what it would take; that's a door, not a wall. > **Exercise:** Klasna's rules: Marta approves 3% for a six-month commitment and 5% for twelve months plus a reference; 10% needs Leo and Hanna, a twelve-month contract and prepayment; 20% isn't offered. Cobalt asks for 10% with no commitment. What is the honest answer? ## Answering the request **Alex Tutor:** First ask what's behind it. «Same as now» may mean her budget is fixed, or that she needs a win to show procurement. Each needs a different trade. **Marta:** Then put a number on what she's asking, check who can approve it, and offer the trade in writing. Whatever we agree goes into the contract, not into someone's memory. **Alex Tutor:** And give choices. «800 on 30 days, or 776 with a six-month commitment» lets her pick the trade that suits Cobalt, and both options work for us. **Sofia:** So whichever she picks, the price moves only when something else moves too. > **Exercise:** Put the steps for answering a discount request in order. ## Your reply to Cobalt **Marta:** Draft the reply to Cobalt's learning lead. Warm, short, and with a trade she can actually take. **Sofia:** Do I tell her what a discount costs us? **Alex Tutor:** No need to share our margins. Say what you can offer and what you'd need in return. Keep the arithmetic for Marta. **Marta:** And remember: if she says no to every trade, the discount was never about price. Then we're back to discovery, not to a lower number. > **Exercise:** Write your reply to Cobalt's learning lead (3–5 sentences). She asks for 10% off and 60 days to pay. Offer two trades that fit Klasna's approval rules (3% for a six-month commitment and 5% for twelve months plus a reference, approved by Marta; 10% only with a twelve-month contract and prepayment, approved by Leo and Hanna; 20% isn't offered), without sharing Klasna's margins and without pressure. > **Key ideas** > > - A discount comes out of contribution, not price. Extra volume needed = d ÷ (m − d): 10% off 800 (80 UAH) on a 339 contribution needs 80 ÷ 259 = 30.89% more lessons. > - Longer payment terms are a hidden discount: 30 extra days at 24% a year cost 15.78 UAH a lesson, about 2% of the price. > - Trade, don't give: a discount for more volume, a longer contract, prepayment or a reference. > - Follow the approval matrix; bigger concessions need more senior approval and a bigger give. > - No invented deadlines or bosses. Ask what's behind the request, offer choices in writing, and put the agreed trade in the contract. **Alex Tutor:** Next, the hard one: Veloria's procurement asks for 20% off and 60 days at once. You'll have the numbers and the price sheet. - Previous lesson: [The ROI case for the finance director](https://productovi.com/courses/b2b-marketing-and-sales/the-roi-case.md) - Next lesson: [Case: 60 days and 20% off](https://productovi.com/courses/b2b-marketing-and-sales/sixty-days-twenty-percent-case.md) --- Productovi Learning. 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