The Dangers of Discounting Your Price to Create Cash Flow

Recently I spoke at a large conference on the subject of how to maintain your price and avoid discounting. After the presentation, a businessperson approached me and asked what my strategy would be if his company needed to discount price to create cash flow. This is not an easy question to answer.

Sure, I could easily throw out a response that implies that the reason a company has to discount is because it hasn't done a good enough job building its pipeline or hasn't invested enough in the right type of marketing. I know, though, that this isn't the answer a person needs when faced with the issue of cash flow.

Cash flow is a huge issue to a lot of companies, large and small. I would be lying if I didn't admit that even in my company we've experienced periods of tight cash flow.

The question we're answering is if cutting a price to get a deal is a smart way to create cash flow.

Here is my answer: