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The net price is your list price minus the discount. The annual revenue given away is the gap between what those customers would pay at list and what they actually pay, across a full year.
The reason it stings in SaaS is the word recurring. A one-time 20 percent off is a concession. A 20 percent discount on a subscription repeats every single month until that customer leaves.
Discounts feel free in the moment because they help close the deal in front of you. The cost is invisible because it shows up later, spread across months and customers, never as one painful line.
Before you discount, ask what it is buying, a longer contract, a case study, a faster close. A discount that buys nothing is just permanently lower pricing dressed up as a deal.
Find the net price after the discount, then take the gap between annual revenue at list and annual revenue discounted, across all customers on the deal.
Because the discount recurs. On a subscription it repeats every month until the customer churns, so the lifetime cost is far larger than it first appears.
When it buys something in return, a longer commitment, a reference, a meaningfully faster close. A discount that buys nothing is just a lower price.
Rarely. Discounting to save an account trains customers to threaten to leave. Fix the value problem behind the churn instead.
The 30-minute audit includes whether your discounting is quietly eroding revenue. No sales sequence.
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