What's Causing Your Low Average Deal Size?
Close Bigger Deals Without Discounting to Get There
Real Client Testimonial from Mark Cope – Chief Revenue Officer @ Corestream
"I just knew that if we could all get on board with this methodology and rip up the old script throw away the old pitch deck and actually have a business conversation to try and find problems we can solve, it was going to change the entire path of the business."
Low Average Deal Size
Are you leaving money on the table with every deal you close?
Common Questions About Low Average Deal Size
What's causing our low average deal size?
Low average deal size usually traces back to leverage, not price sensitivity. When a rep hasn't done deep enough discovery to understand the business problem and its cost, they have nothing to defend a higher price with. They default to the base package or discount to keep the deal moving, because they can't yet prove the bigger solution is worth more.
Is a low average deal size just a pricing problem?
Rarely. Pricing is usually the symptom, not the cause. A rep who has fully mapped a buyer's problem, its business impact, and the cost of leaving it unsolved has the leverage to hold price or sell the higher-value solution. A rep without that data is negotiating from a weaker position before the conversation even starts.
Does discounting help close more deals?
It can close the deal in front of you while quietly shrinking every deal after it. Discounting to win a deal signals that price was never firm, which trains buyers, and sometimes an entire sales team, to expect the same flexibility next time.
What's the earliest sign a deal is going to close smaller than it should?
A discovery call that moves to the pitch or the base package within the first few minutes. When a rep can't restate the buyer's business problem, its cost, and why the buyer needs to act now, there's no foundation to negotiate value from later, and the deal defaults down to whatever the buyer's initial budget assumption was.
How do we find out which of these causes is driving our numbers?
Diagnosing which cause is active in a specific pipeline means scoring the deals themselves rather than reading a single average deal size. ASG's Quick Pulse Revenue Performance Assessment scores a pipeline against twelve yes-or-no questions across the areas most likely to be driving deal value down.
Understanding the Problem
It's all about leverage. Protecting your pricing or selling additional products and services in the initial sale is about leverage, and too many salespeople give it away. The problem lies in a few areas:
- Lack of confidence in salespeople to ask for more, for fear of losing the sale.
- The inability of salespeople to know why a prospect should buy the offering in the first place.
- The sales team is unable to demonstrate the value in their solution.
- Defaulting to the "base" package, because the sales team lacks knowledge of the buyer's business problems and therefore can't provide the appropriate solution for each unique buyer.
Protecting price and selling more requires focusing on the buyer's business challenges and why they need a new solution. Far too often salespeople jump to conclusions, do a poor job of discovery, and quickly move to the demo or product pitch. When this happens, salespeople give away the leverage needed to defend their price or the higher-priced solution.
The Organizational Cause Behind Low Average Deal Size
Leverage isn't a negotiation tactic a rep either has or doesn't. It's a direct output of the evidence behind the deal. Buyer Input Data, or BID, is the buyer-verified problem, impact, and cost of inaction a rep collects during discovery. When BID is thin, the rep is negotiating on price because price is the only thing left to talk about. When BID is fully developed, the rep is negotiating on value, because the buyer already understands what the problem is costing them.
ASG scores deals against BID on a Red, Yellow, Green scale. The pattern shows up directly in deal size, not just win rate:
Same reps, same product. The average Green-BID deal is nearly twice the size of a Red-BID deal, and closes faster.
The gap isn't because Green deals were bigger opportunities to begin with. It's because a rep who has fully mapped the buyer's problem, its cost, and the impact of leaving it unsolved can defend a bigger solution instead of defaulting to the smallest one that gets a signature.
| Cause | Named Concept | Mechanism | Effect on Deal Size |
|---|---|---|---|
| Rep can't defend a higher price | Weak leverage | Discovery didn't surface a business problem worth more than the base package | Rep defaults to the smallest package that closes, rather than the one that solves the real problem |
| Buyer sees no reason to spend more | Problem Identification Chart (PIC) | Rep enters the deal without a pre-built map of the buyer's likely problems and their business impact | Conversation stays product-level, so price becomes the only differentiator left to discuss |
| Deal negotiates down instead of holding value | Buyer Input Data (BID) | Deal lacks buyer-verified confirmation of the problem's cost and the impact of inaction | Rep has nothing to point back to when the buyer pushes on price, so the deal shrinks to close |
Diagnosing the Root Cause
Have you listened to your team's discovery calls? How quickly do they go to the pitch? How quickly do they start talking about the product?
Open up the CRM. Look at the notes. How detailed are they? Do they contain a detailed description of the prospect's business problems? Do they quantify the problems the buyer is currently facing? Do they include the root causes or reasons why the problem exists? If not, your team doesn't have the leverage to defend your price, or the data to support a recommendation for a more expensive, better-suited solution.
How To Fix It
To fix low average deal size, sales teams need to create an environment where they have the leverage to challenge the buyer when they push back on price, and where the buyer sees the value before the end of the sale. Position the price, or the higher-priced solution, as the best value for the issues the buyer is experiencing today and the cost of achieving their desired outcomes. The sales team has to put themselves in a position to say:
"I'm confused, you shared earlier that you were losing 500k a month in billings due to this problem, and that it was preventing you from scaling the business, and our solution only costs 15k a month. Can you help me understand?"
Getting your team to a place with leverage and the ability to challenge buyers is how you protect and increase your average deal size.
Need more help with this problem?
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Tell Me More!All The Way Down Here?
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