The Relationship Between Discount and Win Rate

This research examines the long-held assumption that discounts increase win rates and, by extension, revenue. Using the Winning by Design Bowtie data model and scenario-based growth formulas, the paper quantifies how much win rate must improve to compensate for revenue lost through discounting—and shows that such improvements are rarely achievable in practice. It further incorporates insights from The JOLT Effect, demonstrating that discounts often act as “critical events” that increase buyer indecision and post-decision regret, leading to lower win rates and higher churn. The research concludes with a disciplined alternative: trading value instead of negotiating price.

Best For

• CROs & Sales Leaders managing pricing, discounting, and win rates

• CFOs & Finance leaders protecting ARR, margin, and forecast integrity

• Revenue & RevOps teams modeling deal economics and GTM efficiency

• Sales Enablement leaders training disciplined negotiation behaviors

• CEOs & Founders evaluating revenue leakage and pricing strategy

Key Takeaways

• Discounts reduce ARR linearly, while win rate improvements are difficult and marginal

• To offset a 20% discount, win rate must improve from 20% to 25%—an unrealistic jump for most teams

• Research from The JOLT Effect shows discounting can decrease win rate, not increase it

• A 20% discount paired with a 10% win-rate drop can result in a 28% revenue loss

• Many sales orgs give away significant ARR due to undisciplined discounting practices

• High, rounded discounts signal weak process and poor negotiation discipline

• Discounting increases churn risk due to post-decision regret

• The alternative is to trade value, not negotiate price (references, terms, commitments, multi-year deals)