ASP (Average Selling Price)
ASP is not the price you ask for. It's the price the market, filtered through your real negotiations, has actually accepted to pay.
“An ASP that declines quarter after quarter is not a pricing problem. It's a positioning problem that shows up as a discount.”
Otto GTM ObservatoryWhy ASP tells the truth about negotiating power
The price list says how much you'd like to sell for. ASP says how much you actually managed to defend in negotiation. The gap between the two, tracked over time, is the most direct way to measure the erosion (or strengthening) of the sales team's negotiating power.
Segmenting ASP by rep quickly identifies who negotiates well and who systematically caves under buyer pressure, information useful both for coaching and for revising discount approval criteria.
Anti-patterns
Common mistake: looking only at total quarterly revenue, which can grow even with a freefalling ASP if deal volume rises enough to compensate.
Second mistake: not tracking average discount separately from ASP, losing visibility into how much of the price variation depends on product mix and how much instead depends on negotiation concessions.
Practical Application
A company closes 21 deals in a quarter for total revenue of €976,500: ASP of €46,500. The following quarter it closes 26 deals but with total revenue of €1,014,000: ASP dropped to €39,000, a 16.1% decline masked by slightly growing total revenue and an average discount that rose from 8% to 19% granted by the sales team to accelerate end-of-quarter closes.