Whoever the salesperson asks

"Discounts are approved by whoever the salesperson asks." It is one sentence on our pricing grid, and it is the one people quote back. Not because it describes a business with no rules. Because it describes a business with rules, in a handbook, that everybody in the room has just recognised they do not use.

That is the useful thing about an unflattering sentence. Nobody identifies with having no discount policy. Quite a lot of people, reading that cell, quietly recall the last urgent deal.

The policy that exists on paper

The most common real answer to "who can give price away" is the second cell, not the first: an approval ladder exists on paper but is routinely bypassed for anything urgent. The ladder was written properly. Sales representatives to 5%, managers to 10%, the general manager beyond that. It sits in the handbook and it is, in a sense, true.

What actually happens is that a deal arrives on Thursday with a Friday close. The representative needs 12%. Their manager is travelling. They ask the other manager, who is not their manager but is in the office and has the authority. Or they ask the commercial director directly, framing it as a strategic account. Or they give 8% on price and the rest in extended terms, which the ladder does not mention. The deal closes; the discount is never recorded as an exception because, technically, someone with authority approved it.

Multiply by every urgent deal, which is most of them, and the ladder is decorative. The salesperson has learned, correctly, that the real approval process is: find someone who will say yes. Hence the sentence.

What it does to selling

The damage is not mainly the discounts themselves. It is what the process teaches.

It teaches the customer that the first price is not the price. Buyers learn quickly which suppliers have an approval step they can push against, and "let me see what I can do" becomes the opening of every negotiation rather than the end of it.

It teaches the salesperson that price is the lever. If the fastest way to close is to find an approver, the representative gets good at finding approvers, not at defending value. The sales incentive, usually paid on revenue, agrees with them. Every discount that closes a deal is rational.

It teaches both sides that price can be negotiated away without trading anything tangible: longer delivery time, shorter payment terms, quarterly volume.

And it teaches the business nothing at all, because none of it is recorded. Overrides that are not counted cannot be reviewed. So the same discount is granted to the same customer for the same non-reason next year. The pocket price drifts down a point at a time, and nobody has decided anything.

The fix takes a fortnight, not a system

The instinct is to buy quoting software with hard stops. Resist it for now. The software enforces whatever ladder you give it, and if the ladder is wrong the sales team will route around the software as fluently as they routed around the handbook.

Do three things first.

Write the ladder that reflects the deals you actually do. Who can give what, by how much, for what deal size, and, crucially, what counts as a discount: price, terms, freight, free goods, rebates. If terms are not on the ladder, every discount becomes terms. This takes one meeting with sales and finance in the same room.

Switch on tracking, even in a spreadsheet. Every discount above the representative's own authority gets a line: customer, amount, form, who approved, why. Not to punish anyone. To count. Within a quarter you will know the override rate, which approvers say yes to everything, and which customers arrive with an urgent deal every month.

Review the pattern, not the instances. Quarterly, read the log for what it says about the structure. If a third of deals need an exception, the problem is not discipline; it is a price structure that does not fit the business, and the exceptions are telling you where. Fix the structure and the exceptions fall.

The point is not policing

The top of this practice is not a business where every discount is stopped at the gate. It is one where override rates fall over time, because the guidance is good enough that sales rarely needs to escalate. That guidance is a target, a floor and a walk-away price for the ten most common deal situations, visible at the point of quote. Sales trusts it because it demonstrably wins deals at better margins.

That is a long way from "whoever the salesperson asks", and the distance is worth points of margin. But the first step is short. Write the real ladder, start counting, and read the log. If you want to know how much money is in it, build the price waterfall for your ten largest customers first; the exceptions will be sitting in it, in dollars.

Where does your discount control honestly stand? · The stages of excellence in pricing