You're facing a client demanding a deep discount. How do you handle the pricing negotiation effectively?

The premise of this question is incorrect, as are most of the answers so far. The correct way to approach this situation is to understand that the client demanding a deep discount is taking the space of another client who wouldn't. If they don't have the budget to afford you or don't value what you do, don't clog up your capacity trying to make them happy. It'll never happen. Spend the time finding the client that's a better fit. That's the actual answer to this question.

Try flipping it on its head and ask the client how often they deeply discount their services, ask them the 'what if' one of their clients were asking the same would they be so keen to accommodate or would they stand behind their prices and value of service/product.

When a client demands a deep discount, focus on the value your product or service offers rather than price alone. Acknowledge their request, but explain the benefits and ROI they’ll gain at the current rate. Highlight how your solution solves their specific challenges, and offer flexible payment terms or added features if possible, rather than reducing the price. Emphasize quality and long-term results to shift the focus from cost to value, ensuring both parties find a fair compromise.