Words I like: “We don’t give discounts. We buy value.” – Todd Caponi
Almost every CEO has done it.
A deal is close, the client pushes on price, and to keep things moving, you knock a few thousand off. It feels like progress.
What actually happened is you taught that client your price was never real, and you handed away gross margin you’ll never get back. Do that enough times and your pricing stops meaning anything.
Here’s how to fix it.
The framework comes from Todd Caponi’s work on transparent negotiation. It rests on one idea worth sitting with: your price, like the price of every for-profit company on earth, is built on 4 levers.
Once you know those 4 levers, a discount request stops being a threat. It becomes a conversation about which lever to pull.
Lever 1) Volume: How Much They Buy
The more a client commits to buy, the lower your per-unit price can go.
Commit to less, and the unit price goes up. This is the primary driver of price, and most CEOs already feel it in their gut.
The mistake is treating volume as fixed when it’s actually the first thing on the table.
When a client wants a better rate, the honest answer is often, “We can get you there. What would it look like to expand the scope?”
You’re not caving. You’re trading a lower unit price for more total value.
Pro Tip: Before you ever discuss a discount, know your real price at three different volume levels. If you can’t answer that on the spot, you’ll negotiate from a scarcity mindset instead of simple math.
Lever 2) Timing Of Cash: How Fast They Pay
Cash in your hand today is worth more than the same cash in 90 days.
So when a client pays faster, you can afford to pay them for it in the form of a small discount.
When they pay slower, the price has to move the other way.
This is exactly how we price our own engagements. Our clients receive invoices on the 20th that are due on the 1st for upfront payment for the next month of service from their fractional executive.
When clients pay for 3, 6, or 12 months upfront, then we will pay them in the form of a 5%-10% discount.
Pro Tip: When your price is built on an upfront payment, and procurement asks for NET60, you don’t just say yes. If they need NET60, calmly review the 4 levers and ask them how to balance it.
Lever 3) Length Of Commitment: How Long They Stay
A 3 month commitment and a 3 year commitment are not the same deal, and they shouldn’t carry the same price.
The longer a client is willing to commit, the more you can afford to reward them for protecting your forecast and your planning.
This cuts both ways, and it’s where CEOs give away the most.
When a client asks for the ability to cancel at any time with 5-10 days’ notice, they’re basically asking for ZERO commitment.
You can give them that. The price just has to reflect it, sometimes dramatically.
Our fractional executive engagements typically start as 6 month or 12 month commitments and continue monthly after the initial term.
Clients get a ton of flexibility to adjust the month-to-month capacity needed, and we require 30 days’ notice to end an engagement to protect our forecast and planning.
Pro Tip: A pilot, or “let’s just try it,” request is a short commitment in a long-term costume. Price it like the short commitment it is.
Lever 4) Timing Of The Deal: When They Sign
Our brains are prediction machines.
We don’t buy when we’re convinced. We buy when we can predict the outcome.
There’s real financial value in being able to forecast revenue, so when a client helps you predict by signing now, that’s worth something you can pay them for.
The flip side matters just as much.
Never hold a predictability discount for an unpredictable timeline.
Pro Tip: The strongest words in a pricing negotiation are “I don’t know.” When a buyer asks you to hold a price for ninety days, say: “I don’t know if I can, because this price was built on our mutual alignment around timing. What I do know is if we sign this month, this price holds.”
The End Of Adversarial Negotiations
When a buyer asks for a discount, many sellers either turn adversarial or cave immediately. Neither works.
Use this three-step framework:
- Be human. Listen. Ask genuinely curious questions. Seek to understand what’s driving the request.
- Review all 4 levers. Remind the buyer how your pricing is configured, and don’t assume they remember, even if it’s written.
- Discuss using all 4 levers. Present the control board and ask them how they want to fund the discount. DO NOT ASSUME you know which lever is easiest for them to pull. Let them decide.
This is why we include the 4 levers directly into every Statement of Work draft that Malloy Industries presents to future clients. Here’s our exact language:
FOUR LEVERS
To provide a sound basis for our pricing and ensure transparency in our partnership, the investment details below are regulated by four levers. If you want a lower price, we’ll ask how you would like to fund it by adjusting one of these levers. We don’t give discounts, but we do buy value.
- Volume: How much service that you commit to buy
- (e.g., one fractional executive vs. multiple fractional executives)
- Timing of Cash: How fast you pay for our services
- (e.g., upfront annual payments vs. upfront quarterly installments vs. monthly installments)
- Length of Commitment: How long you commit to our services
- (e.g., six months vs. one year vs. multi-year agreement)
- Timing of the Deal: Mutual alignment on the signature date and kickoff date helps us forecast our business and allocate resources effectively
- (e.g., tomorrow vs. next Wednesday vs. in 1 month)
Pro Tip: Write your version of the Four Levers into your next proposal, so you can inform the buyer how your pricing works before they ever start to negotiate.
The Move
When a client says, “We need this $10,000 cheaper,” the weak answer is yes, and the weak answer is also no.
The strong answer is a question: “We can probably get you there. How do you want to fund it?” Then you talk through the 4 levers together. Buy more volume? Pay faster? Commit longer? Sign sooner?
Every concession becomes a visible trade instead of a quiet loss. The client sees the math. They realize they’re not being gouged and they’re not being played, and that does something no discount ever could.
It builds trust.
Refusing to drop your price for nothing turns out to be the clearest proof you have that your price was honest in the first place.
For your next contract negotiation, try this. Before the call, write down your four levers. Walk in knowing that you will not move your price without moving one of the levers. You’ll protect your margin, and you’ll leave the client trusting you more than when they walked in.
Four levers for more trust.
Whenever you’re ready, here’s how we can help:
- If you already know the altitude and you need the right person fast, the Express Match™ places a relentlessly generous fractional executive to confidently scale your business within 2 weeks.
- Not sure which lever to pull first? The free 30-minute Scalability Audit pinpoints the biggest constraint holding your growth back and shows you how fractional leadership can fix it.
- Want to think it through with other CEOs? Join the Entrepreneur Roundtable.