Price reductions can be crucial in a competitive market, impacting the outcome of a deal. Sales reps understand the pressure: low offers risk losing customers, and high offers hurt profits. The difficulty increases as pricing models become more intricate, encompassing various products, locations, and customer segments.

That’s where CPQ (configure, price, quote) software steps in. CPQ tools bring consistency, safeguard revenue, and eliminate the need for manual pricing calculations by automating discounts and approvals, allowing sales teams to concentrate on sales instead of managing spreadsheets.

Key insights:

• Manual discounting leads to inconsistency, delayed deals, and lost revenue—CPQ automates it for accuracy and control.
• PandaDoc CPQ enforces pricing rules, protects margins, and shortens sales cycles through automation and smart approval workflows.
• Real-time analytics in PandaDoc CPQ help teams track discount performance, uncover trends, and refine pricing strategies.

What is a discounting strategy and why is it important?

A discounting strategy defines how and when price reductions are applied across your products and customers. Done well, it ensures fairness, consistency, and alignment with business goals. Done poorly, it opens the door to pricing chaos.

Without structure, reps may apply discounts inconsistently, delay deals waiting for approvals, or unknowingly undercut margins. Manual approval chains slow down the sales process and frustrate both reps and customers. Automation helps create a smart discount strategy, removing obstacles to keep deals on track.

What is CPQ discounting and how it works

With CPQ discounting, software is used to automate and manage all stages of your discount process. Pricing is determined automatically based on customer type,. The system will automatically enforce company policy based on products, region, and order total.

Common CPQ discounting models include:

• Volume-based discounts: Price reductions triggered when customers buy in bulk.
• Tiered discounts: Different percentage discounts are applied as purchase quantities increase.
• Conditional discounts: Automatic discounts for specific conditions, like repeat customers or promotional bundles.

For instance, a salesperson handling a fleet order could automatically get a 10% discount for the volume, whereas a smaller order might only qualify for a 3% promotional discount, all according to the rules set within the CPQ system.

How CPQ software improves your discounting strategy

A strong CPQ system transforms discounting from a reactive process to a strategic advantage. Here’s how:

• Enforces consistent pricing and discount controls: Rules-based pricing ensures every deal aligns with company guidelines and margin targets, reducing risk of over-discounting.
• Speeds up approvals and shortens sales cycles: Automatic routing for discounts outside set thresholds removes bottlenecks and accelerates deal closure.
• Enables smarter pricing models: Dynamic pricing adjusts automatically as configurations or quantities change, keeping quotes accurate in real time.
• Tracks performance with analytics and insights: Reporting dashboards reveal how discounts are used across teams, products, and regions—helping you refine your strategy and protect profitability.

What to look for in CPQ software for discounting

Not all CPQ tools are created equal. The right solution should integrate smoothly with your existing systems and adapt to your pricing complexity. Look for:

• CRM and ERP integrations: Sync customer, product, and pricing data automatically to eliminate errors and ensure up-to-date quotes.
• User-friendly interface: Make it easy for sales teams to configure discounts without technical training.
• Rule-based discount engine: Define and automate complex discount rules, from percentage-based reductions to multi-tier volume pricing.
• Automated approvals and margin protection: Ensure quotes stay profitable and compliant with minimal manual intervention.

How PandaDoc CPQ supports discounting strategies

PandaDoc CPQ was built to make smart discounting scalable and consistent across your organization.

• Rules-based pricing and discount logic: Configure rules for fixed, percentage, volume, or tiered discounts that apply automatically based on deal criteria.
• Pricing waterfall and discount stacking order: Ensure discounts apply in the correct order—from base adjustments to negotiated discounts—maintaining pricing integrity and preventing margin leakage.
• Conditional overrides and approval workflows: Automatically route deals that exceed discount limits for manager review, maintaining visibility and control.
• Guided selling: Recommend bundles, upsells, or alternative configurations to maximize deal value—without unnecessary discounting.
• Dynamic pricing updates: Instantly reflect pricing changes as reps adjust configurations, features, or quantities.
• Customer-specific pricing integration: Apply negotiated rates for key accounts or returning customers automatically.
• Bundling and add-ons: Account for bundled product discounts while maintaining accurate overall pricing.
• Margin protection: Provide real-time margin visibility, with warnings when deals approach profit thresholds.
• Reporting and analytics: Track discount usage by rep, product, and region to identify trends and optimize pricing strategy.

Conclusion

Discounting doesn’t have to be a margin gamble. With CPQ software, you can standardize pricing rules, automate approvals, and ensure every deal supports your bottom line.

By using PandaDoc CPQ, sales teams can offer discounts with confidence while maintaining a favorable balance between competitive pricing and healthy margins. This strategy helps them find the sweet spot of keeping profits up and prices competitive.

Ready to see how it works? Start your free 14-day trial today.