Write a Discounting Policy for an Agency

You are a fractional revenue leader who has written discounting policies for 20+ digital marketing agencies between $1M and $20M ARR.

Agency: [AGENCY_NAME]
Services we sell: [SERVICES]
Current average discount given last 90 days: [CURRENT_AVG_DISCOUNT]
Deals where discounting is common: [WHERE_IT_HAPPENS]
Reasons reps cite for discounting: [REP_REASONS]
Margin floor we can't go below: [MARGIN_FLOOR]
Approval roles available: [APPROVERS]
Things we'd want clients to trade for a discount: [TRADE_OPTIONS]

Write a one-page discounting policy reps can read in 3 minutes and use immediately. Define discount tiers, who approves each tier, what the rep must get in return (term, case study rights, prepayment, scope reduction), and what is never discounted.

- No discount above [MARGIN_FLOOR] without C-level approval; respect this floor.
- Every discount tier must require a trade — no free discounts.
- Policy must fit on one printed page.
- Use plain, direct language a new rep can understand.
- Include 2-3 example scenarios showing the policy applied.

1. Header: "[AGENCY_NAME] Discounting Policy — Effective [DATE]"
2. Principles (3-4 bullets)
3. Discount tier table: Discount % | Approver | Required Trade
4. Never discounted (bullets)
5. 2-3 example scenarios with rep dialogue
6. Escalation path (1 sentence)

• [AGENCY_NAME] — Your agency
• [SERVICES] — Services where discounting comes up
• [CURRENT_AVG_DISCOUNT] — What you actually discounted last 90 days
• [WHERE_IT_HAPPENS] — Deal types/sizes where it happens most
• [REP_REASONS] — Reasons reps say they discounted
• [MARGIN_FLOOR] — Lowest margin you'll accept
• [APPROVERS] — Roles that can approve discounts
• [TRADE_OPTIONS] — What clients can give you in return

AGENCY_NAME: Pierwood | SERVICES: Paid media retainers, SEO retainers, website builds | CURRENT_AVG_DISCOUNT: 11% | WHERE_IT_HAPPENS: End of quarter on retainers above $7k/mo | REP_REASONS: Competitor pressure, budget mismatch, late-stage pushback | MARGIN_FLOOR: 45% gross margin | APPROVERS: Rep, Sales Manager, COO, CEO | TRADE_OPTIONS: 12-mo term, quarterly prepay, case study, logo rights, expanded scope

Pierwood Discounting Policy — Effective 2026-06-01
Principles: 1) We discount for a reason, never a deadline. 2) Every discount requires a trade. 3) Margin floor: 45% — full stop.

| Discount | Approver | Required Trade |
|---|---|---|
| 0-5% | Rep | 12-mo term OR quarterly prepay |
| 6-10% | Sales Manager | 12-mo term + case study rights |
| 11-15% | COO | 12-mo term + case study + logo rights |
| 16-20% | CEO | All of above + expanded scope or referral commitment |
| >20% | Not allowed | — |

Never discounted: Year 1 fees, rush surcharges, ad spend management fees on first 30 days.

Scenario A: Rep quotes $8k/mo, prospect says "can you do $7,200?" — Rep counters: 10% off if they sign a 12-mo term and grant case study rights. Sales Manager approves.

Scenario B: $25k website project, prospect asks for 25% off. Rep declines and offers a phased scope at full rate instead.

Escalation: any deal needing >20% off goes to CEO with written rationale.

• Put the trade requirement in the CRM as a required field — no trade, no discount.
• Audit discounts monthly for the first quarter the policy is live.
• Don't publish the policy to clients — it's internal only.