Discount policy
A discount policy states what a discount is exchanged for, who may grant which magnitude, and what the concession costs the company, as distinct from an approval workflow, which only routes the request.
A policy answers the question a workflow cannot: should this discount exist. Discounts should be purchased, with term length, prepayment, volume commitment, reference rights, or a narrowed scope. A discount granted for nothing teaches the market that list price is provisional, and that lesson propagates through every subsequent negotiation.
Policy also has to state the decay. Without one, quarter-end discounting becomes the standing expectation and realised price ratchets downward year over year, one defensible exception at a time.
Where it breaks
Approval thresholds exist but nothing defines what the buyer must give in return, so discount depth tracks quarter-end pressure rather than deal value.
Related terms
- Pricing logic
- Pricing logic is the governing rule set that determines what any given customer pays, as distinct from a price list, which is only its output.
- Deal desk
- A deal desk is the control point where non-standard commercial terms are reviewed, approved and recorded before they become contractual obligations.
- Price realisation
- Price realisation is the net commercial amount on a declared basis after applicable discounts, credits, and concessions, divided by the relevant pricing or billing quantity when useful.
- Contract shape
- Contract shape is the structural form an agreement takes, term length, commitment level, billing frequency, ramp, and the conditions under which any of them change.
Field notes on this
- Your pricing is a list, not a logic
A price list says what things cost today. It cannot say what to charge the deal in front of you, which is why realised price drifts and nobody owns the drift.